Preamble

The House met at Half past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

QUEEN'S SPEECH (ANSWER TO ADDRESS)

The VICE-CHAMBERLAIN Of the HOUSEHOLD (Mr. HENRY STUDHOLME): reported Her Majesty's Answer to the Address, as follows:

I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I have opened the present Session of Parliament.

Oral Answers to Questions — COMMONWEALTH RELATIONS

Emigration

Mr. Lewis: asked the Under-Secretary of State for Commonwealth Relations if he will give particulars of the action taken by the Government to encourage emigration to the Commonwealth during the last years; and the figures for emigration to the Commonwealth during the Fast two years.

The Under-Secretary of State for Commonwealth Relations (Mr. John Foster): United Kingdom migration to the Commonwealth is promoted through the Empire Settlement Acts, which have recently been extended for another five years. Under these Acts the United Kingdom Government have concluded an Assisted Passage Agreement with Australia, as well as a large number of agreements with voluntary societies concerned with child migration. There is also the fullest possible co-operation with other Commonwealth Governments in other ways. During the period of two years to 30th June, 1952, 265,513 persons of Commonwealth citizenship migrated from this country to other Commonwealth countries.

Mr. Lewis: Can the Under-Secretary say to what extent any of these proposals of improvements have been initiated by the present Government and what new action the Government are taking to deal with this matter?

Mr. Foster: Not without another Question.

Mr. Hector Hughes: As the needs of emigration, immigration and the transfers of population vary throughout the Commonwealth, would the Minister consider inviting the various Commonwealth countries to a conference, to decide on a common policy?

Mr. Foster: Different circumstances apply to different Commonwealth countries, and I doubt whether a conference of Commonwealth countries would be useful.

Mr. Lewis: Has the Minister looked at "Britain on the Spree"? If he refers to that document he will see, on page 11, that the Government intended to take drastic steps to deal with this problem. The Tory Government now having got the reins, it appears that they have done nothing. Is this another broken promise?

Mr. Foster: Everything is conditional on finding something in the larder.

Coronation (Bamangwato Tribe)

Mr. Emrys Hughes: asked the Under-Secretary of State for Commonwealth Relations what arrangements he is making for the Bamangwato tribe of Bechuanaland to be present in this country for the Coronation.

Mr. J. Foster: The question of representation of the High Commission Territories at the Coronation is under consideration.

Mr. Hughes: Would the Minister give earnest and urgent consideration to this matter and an assurance that whoever is elected by the Bamangwato tribe will be allowed to attend the ceremony?

Mr. Foster: Having in mind the terms of the Question, I cannot hold out any hope that the whole of the tribe will be invited to the Coronation.

Mr. Anthony Greenwood: If any of them do come will they be allowed to go back again?

Oral Answers to Questions — TRADE AND COMMERCE

Terylene

Mr. Janner: asked the President of the Board of Trade what progress is being made with the production in this country of the British textile discovery terylene; and what special steps are being taken to facilitate its production here on a sufficient scale to build up an effective export trade.

The President of the Board of Trade (Mr. Peter Thorneycroft): Production of terylene is at present limited to the output of a pilot plant. A full-scale plant, involving a heavy capital investment, is under construction, and should be in operation towards the end of 1954. Every effort is being made by the company concerned, with the support of the interested Government Departments, to complete the new plant at the earliest date possible.

Mr. Janner: As this is very valuable material—and the President is no doubt aware that a very large export trade could be encouraged in it—will the right hon. Gentleman hasten the production of this material, instead of waiting until 1954?

Mr. Thorneycroft: Those concerned with the building of this plant are hastening it, and we are giving them all the aid we can.

United States (Dairy Import Restrictions)

Mr. Hollis: asked the President of the Board of Trade what steps Her Majesty's Government are proposing to take to guard British interests, in view of the action of the United States Congress which by its restriction on dairy imports under Section 104 of the United States Defence Production Act has infringed Article 11 and Article 23 of the General Agreement on Tariffs and Trade.

Mr. P. Thorneycroft: Her Majesty's Government have strongly supported the representations made to the United States by the countries primarily affected and by the Contracting Parties to the G.A.T.T. that this breach of the General Agreement should be brought to an end, as has consistently been urged on the United States Congress by the Administration.
United Kingdom export interests are not now directly affected, since, as a result

of these representations, the Congress has this year approved certain relaxations under which our Stilton cheese exports were exempted from restriction with effect from 1st October.

Mr. Hollis: While thanking my right hon. Friend for that reply, may I ask him whether it is not a fact that the Commonwealth at large is greatly affected by this even as it is at present, and whether this is not a matter to be brought before the forthcoming conference to see if there can be a joint Commonwealth policy on it?

Mr. Thorneycroft: We shall do everything we can, both alone and together with the Commonwealth, to get this particular restriction removed.

Factory Building (Value)

Mr. Mikardo: asked the President of the Board of Trade what value of factory building was authorised from 1st January, 1952, to the latest convenient date; and what was the value authorised in the same period in 1951.

Mr. P. Thorneycroft: The estimated value of Industrial Development Certificates granted by the Board of Trade for new factory buildings and extension exceeding 5,000 sq. ft. fell from £54 million in the first half of 1951 to £28.7 million in the first half of 1952, as the result of a substantial fall in applications. But, as the hon. Member is aware, figures indicating the value of Industrial Development Certificates granted do not measure the value of building licensed or of work started in the periods to which they relate.
I understand from my right hon. Friend the Minister of Works that the value of new industrial building licences issued by his Department for the first six months of 1951 was £68 million compared with £60.7 million in the first half of 1952.

Mr. Mikardo: Will the right hon. Gentleman send this information about the decline of factory building to the Minister of Housing and Local Government, who told a quite different story to a lot of gullible people at Scarborough?

Mr. Thorneycroft: I do not think that the Minister of Housing and Local Government has said anything which is inconsistent with this answer.

New Factories, Wales

Mr. G. Thomas: asked the President of the Board of Trade how many new factories were built in Wales during 1949, 1950 and 1951; and the number upon which construction has started since October, 1951.

Mr. P. Thorneycroft: In 1949, 1950 and 1951 the numbers of new factories (including extensions to existing factories) completed in Wales were 74, 65 and 59 respectively. Since 1st October, 1951, work has been started on 45 new projects. These figures relate to projects of 5,000 square feet and over.

Mr. Thomas: Would the President be able to let me have the names of the sites of these factories—perhaps by post, if not in the OFFICIAL REPORT?

Mr. Thorneycroft: I will give the hon. Gentleman any further information I can if he sees me afterwards.

Clothing and Household Textiles (Standards)

Mr. Dodds: asked the President of the Board of Trade (1) following the ending of the Utility scheme, what progress has been made in devising methods whereby the public can be assured of reasonable standards for clothing, household linens and furnishing fabrics;
(2) what progress has been made in respect to the problem of informative labelling of clothing as an aid to maximum serviceability.

Mr. P. Thorneycroft: In my view, the best assurance of reasonable standards for goods in the shops lies in the competition of British manufacturers for the custom of careful buyers. As the House knows, standards are being agreed between the British Standards Institute and industry to help the customer in his choice, and I understand that British Standards have been published or are in course of publication for bedding, industrial safety footwear and a range of women's, girls' and infants' clothing. Standards for other items of clothing, as well as for some cotton and rayon fabrics and household textiles may be expected before long.
Arrangements for labelling clothing to show compliance with these British Standards are being discussed by the British Standards Institution and the light

clothing industry, but they cannot be completed until standards have been issued for the cloth.

Mr. Dodds: But will not the right hon. Gentleman bear in mind that undertakings were given, on the scrapping of the Utility scheme, that something else would take its place, and probably better? Will he take a greater interest in this to see that something is brought out which is practical at the earliest possible moment, because there is still need to avoid a great deal of waste?

Mr. Thorneycroft: I take a close interest in this matter, and all the undertakings I have given are being specifically honoured.

Mr. Hirst: Is my right hon. Friend aware that the sort of aspersions contained in Question No. 10 are greatly resented by all those employed in the textile industries, whose products are second to none?

Mr. Manuel: Is the right hon. Gentleman aware that while voluntary adherence to standards may be all very well, in the economic position of our country many people have not enough money to buy the sort of articles they would like and are inevitably driven to cheaper articles, and that if there is no safeguard of standards they will not be as well clothed as they would be otherwise?

Mr. Thorneycroft: There is a very high standard of goods in the shops available now to discriminating buyers.

Mr. Dodds: Does not the right hon. Gentleman appreciate that he gave undertakings that these things would be done at the earliest possible moment, and, with reference to the second of my Questions, does he realise that it is necessary to protect the public from many unscrupulous producers?

Mr. Thorneycroft: This work is going steadily forward with the co-operation of the British Standards Institute and the industries concerned, and I am satisfied with what is being done.

Clothing Industry Council

Mr. Dodds: asked the President of the Board of Trade whether he has yet made a decision about the future of the Clothing Industry Development Council.

Mr. P. Thorneycroft: I am not yet in a position to make a statement on this matter.

Mr. Dodds: Is it not a shocking state of affairs that the President, month after month for nearly 12 months, has been stating that he is trying to make up his mind about this? Is it really fair to the members of the Council, who have done a good job, and could do better still if they had an assurance? Is the right hon. Gentleman practising another form of Chinese torture to get rid of the members of this Council?

Mr. Thorneycroft: I do not think there is anything shocking, in this.

Mr. Dodds: They think so.

Mr. Thorneycroft: This Council has done a good job of work, and I am in discussion with those concerned to see how this type of work can be carried on in the future.

Mr. Dodds: When shall we get an answer?

Mr. Albu: Will the right hon. Gentleman not agree that the Council has provided a very useful consultative service to industry that has probably had the effect of raising productivity?

Mr. Thorneycroft: I think the consultative work has been one of the most valuable sides of its activities.

Factory Building (Development Areas)

Mr. Peart: asked the President of the Board of Trade how many applications have been made for new factories and factory extensions in the West Cumberland Development Area; and how many licences to build have been granted.

Mr. P. Thorneycroft: According to the latest available figures, 55 applications have been made and 50 building licences granted since the beginning of 1945. These figures relate to projects of 5,000 square feet or over for new factories and extensions to existing factories; and they exclude projects which are known to have lapsed.

Mr. Peart: Is the right hon. Gentleman aware that we have factories in course of construction at present in the West Cumberland area? Is he further aware that the Labour Government had plans to attract a further 10,000 workers into that

area for employment. Is he also aware that one factory dismissed 200 workers only recently? Would he investigate that matter?

Mr. Thorneycroft: This Question is restricted to how many licences to build have been granted, and that I have answered.

Mr. Peart: Will the President bear in mind the points I have mentioned, because we have a fear that, despite what he has said, our plans will be frustrated?

Mr. Thorneycroft: Perhaps the hon. Gentleman, if he wants to know about other things, will put Questions down.

Mr. Peart: asked the President of the Board of Trade the amount of factory building licensed for each Development Area, respectively, for 1952.

Mr. P. Thorneycroft: As the answer contains a table of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Mr. Peart: Will the right hon. Gentleman see that in his plans for the Development Areas new factory building will not be frustrated by the circular which has been issued by the Minister of Housing and Local Government—Circular 54/52—which refers to Section 3 of the Distribution of Industry Act and which states that grants are to be cut down for important service?

Mr. Thorneycroft: That is a wholly different question from that on the Paper.

Mr. Peart: It is very important as it affects factory building.

Following is the answer:


NEW FACTORY PROJECTS WITH AN AREA OF OVER 5,000 SQUARE FEET FOR NEW FACTORIES AND EXTENSIONS TO EXISTING FACTORIES.


Development Area
Number of projects licensed 1st January, 1952, to 30th September, 1952
Area ('000 sq. ft.)


Scottish
15
432


North Eastern
20
604


West Cumberland
2
115


South Lancashire
6
95


Merseyside
10
1,131


Wrexham
—
—


South Wales and Monmouthshire
30
498

Tie Silk Imports

Air Commodore Harvey: asked the President of the Board of Trade if he will further reduce the quota for the importation of tie silk from abroad when next considering this question.

Mr. P. Thorneycroft: There is no separate import quota for tie silk. As has already been announced, there will be a single quota for imports of textile piecegoods from Western European and certain other foreign countries in the first six months of 1953. The value of this quota will be determined in the light of our balance of payments position.

Air Commodore Harvey: Will my right hon. Friend bear in mind that foreign materials brought into Britain for making up into ties is sold with a label on it, "Made in Britain"? It is not fair on the tie industry, which has had a very rough time.

Mr. Thorneycroft: Perhaps my hon. and gallant Friend would raise that matter separately. This Question refers to the quota for imported piece goods. As I say, no separate quota is, in fact, granted.

Textile Industry (Recovery)

Air Commodore Harvey: asked the President of the Board of Trade to make a statement on the present position of the textile industry, and particularly as to what improvements have taken place in recent months.

Mr. P. Thorneycroft: I am glad to say that a considerable improvement has taken place in recent months in production and employment in the textile industries. Unemployment has fallen by over two-thirds in five months, from 143,000 in May to 45,000 in October, and since May the latest figures show an increase of 35 per cent. in the production of cotton yarn, and of 26 per cent. in the deliveries of worsted yarn.
The recovery of the textile industries is far from complete but, helped by accelerated defence orders placed this year, it has made substantial progress.

Air Commodore Harvey: While congratulating my right hon. Friend on this very welcome achievement, may I ask

him whether, when the conference of Commonwealth Prime Ministers takes place he will discuss this matter with the British textile industry as fully as possible, in view of much unfair competition from Japan and elsewhere?

Mr. Thorneycroft: I assure my hon. and gallant Friend that the problems of the textile industry will never be forgotten by us.

Mr. Anthony Greenwood: While we all welcome the improvement to which the right hon. Gentleman has referred, may I ask him whether he could tell the House to what extent there has been an improvement in the export position, and whether he could say whether he believes that the industry will be able to achieve the very high target set by the Cotton Board for next year?

Mr. Thorneycroft: I did make a statement in the debate recently about the export figures, but if the hon. Gentleman would like them in detail perhaps he would put a Question down.

Mr. Shinwell: As the real deterioration only set in after this Government was returned, why are the Government now bragging about the improvement?

Mr. Thorneycroft: If the right hon. Gentleman will consult those of his hon. Friends who understand this matter they will explain to him that the recession in textiles started long before this Government came into office.

Major Lloyd: Would it be too much to expect certain hon. and right hon. Gentlemen opposite to cease from trying to exploit the difficulties of the textile industry for purely political purposes?

Mr. Lee: Is the Minister aware that he, like the Chancellor, is now stating that the improvement is due to the Government placing re-armament orders and that that means that as soon as those orders are finished the cotton operatives will have to go back into despondency again?

Mr. Thorneycroft: If the hon. Gentleman would study the terms of my answer he would see that I said the recovery was helped by accelerated defence orders placed this year.

Coronation (Lodging and Hotel Charges)

Sir Edward Keeling: asked the President of the Board of Trade whether any list is being prepared of householders who are willing to provide lodging for visitors to this country for the Coronation.

Mr. P. Thorneycroft: Yes, Sir. I am informed by the British Travel and Holidays Association that such a list already exists and arrangements are being made to extend it in time for the Coronation.

Miss Burton: asked the President of the Board of Trade (1) whether he is in a position to make a statement on the Government's policy regarding the measures put forward by the Coronation Accommodation Committee concerning hotel charges for rooms on the Coronation route;
(2) whether he is aware of public annoyance at prices being asked for accommodation in both large and small hotels near the time of the Coronation; and, as such annoyance damages the goodwill of the entire hotel industry in London, if the Government will recommend that a list of charges covering the period from mid-May to mid-June be published;
(3) whether he is aware of the high prices being asked for viewing accommodation along the Coronation route; and if, therefore, he will request the Coronation Accommodation Committee to issue a statement making quite clear where hotel charges include an actual view and, where such is not the case, what charge is being made.

Mr. P. Thorneycroft: The Coronation Accommodation Committee inform me that they will undertake to investigate any specific allegations of over-charging brought to their notice. I will, therefore, arrange to refer to them for investigation details of any specific cases brought to my attention where exorbitant prices are alleged to have been asked for accommodation.
The Committee have also undertaken to consider with those concerned, the suggestion that the hotels on or near the processional route should indicate whether or not their charges include facilities for seeing the procession.
I think that in view of the very large number of hotels involved and the variety

of accommodation, the idea of publishing a list of charges would be inappropriate, and that the procedure envisaged will be the most effective way of dealing with the matter.

Miss Burton: Is the right hon. Gentleman aware that a great many people, and certainly I myself, are not satisfied with that answer? May I ask him, first of all, because I think that I should say this, if he is aware that the example which I quoted to him a fortnight ago was made by the Male Travel Bureau, of Madison Avenue, New York, and that they still adhere to that statement? May I also ask the right hon. Gentleman whether he does not realise that, if a list of these charges is not made, this business will go on because people who are being advised that hotels are full for this period believe that that is not the case? Will he ask for a further statement from the Coronation Accommodation Committee?

Mr. Thorneycroft: A great deal of the hotel accommodation has been already let.

Miss Burton: Is the right hon. Gentleman aware that the public find it very difficult to reconcile statements from the hotels that they are full with statements that they do not know what charges they will be making? How can they be full, if these charges are not yet known?

Mr. Thorneycroft: I have some sympathy with the hon. Lady's point of view about these charges, as I said on the last occasion when she put down a Question about it. If she has specific instances in which she wants investigation made and she will draw my attention to them or the attention of the Coronation Accommodation Committee, I will see that that is done.

Weights and Measures (Metric System)

Mr. H. Hynd: asked the President of the Board of Trade what recent consideration has been given to the metric system for the benefit of British trade.

Mr. P. Thorneycroft: As I announced in reply to a Question by my hon. Friend the Member for the Cities of London and Westminster (Sir H. Webbe) on Tuesday last, I have decided that I cannot accept the recommendation that


the Imperial system of weights and measures should be abolished in favour of the metric system.

Mr. Hynd: Will the right hon. Gentleman please not close his mind on this matter, and at any rate bear it in mind as a possible part of a long-term solution of some of our international trade difficulties?

Mr. Thorneycroft: I am also impressed by the very considerable dislocation that would take place in commerce and industry during any change over.

Lieut.-Colonel Lipton: Will the right hon. Gentleman bear in mind that it would make a useful contribution towards the metric system if he persuaded the Chancellor to abolish half-crowns and have 10 pennies to the shilling?

Monopolies Commission

Mr. Lewis: asked the President of the Board of Trade to give particulars of the manner in which he has strengthened the power of the Monopolies Commission and enabled it to speed up its work; and when these new powers will become operative.

Mr. P. Thorneycroft: As I explained in the debate on the Address on 5th November, it is the Government's intention to introduce a Bill dealing with these matters. It will not, however, be practicable to do so during the present Session.

Mr. Lewis: But is the right hon. Gentleman not aware that for some four or five years the Conservative Party have been saying that they would do this, and are we to have it put off again? Is he not aware that our people would far prefer to have a Bill for this purpose than the de-nationalisation of transport and steel; and will he bring forward this Bill and drop the other two?

Mr. Thorneycroft: While I also am conscious of the desirability of extending the scope of the Monopolies Commission to cover nationalised industries, we have already spent some days discussing what should or should not be in the Gracious Speech, and I do not think I ought to extend it further in answer to a supplementary question.

British Industries Fair, Birmingham (Facilities)

Mr. Albu: asked the President of the Board of Trade what steps he is taking to improve the facilities for visitors at the British Industries Fair at Birmingham.

Mr. P. Thorneycroft: I am not aware of any widespread dissatisfaction. But the Birmingham Chamber of Commerce, who have so successfully organised the Birmingham section of the Fair, and with whom the responsibility for the management of the section rests, will, I am assured, gladly consider any suggestion for improvement.

Mr. Albu: Is the President not aware that grave dissatisfaction has been expressed by foreign buyers, at both the restaurant and lavatory facilities at Birmingham; that in a recent inquiry of the National Union of Manufacturers 95 per cent. of the replies expressed the opinion that the facilities were absolutely deplorable, and that one manufacturer said that the catering facilities could only be compared with the British Army's incompetence in the First World War?

Mr. Thorneycroft: I believe that the vast majority of people, buyers and others, who visit that Fair are impressed with the extraordinarily good exhibition that is organised. But if the hon. Gentleman has any specific examples or instances to suggest, I am quite satisfied that the Birmingham Chamber of Commerce would be very happy to consider them.

Mr. Nabarro: Will my right hon. Friend bear in mind that the most important contribution which would be made to improving facilities at these fairs is a direct railway service from Earl's Court, London, to Castle Bromwich, outside Birmingham, with wholesome carriages and decent dining cars and buffet cars to enable foreign visitors to travel easily and comfortably between the two places?

Mr. Usborne: Does the right hon. Gentleman realise that the implications of this Question are not that the exhibits at the Fair are inferior but that the feeding and other facilities for visitors are deplorable? I know, speaking as a Member representing one of the Birmingham constituencies, and frequently having gone to the Fair, that the criticisms contained in my hon. Friend's supplementary question are entirely justified.

Mr. Nabarro: And mine.

Mr. Thorneycroft: I have assured the hon. Gentleman that if specific examples are drawn to my attention I shall be happy to look into them.

North-East Lancashire Development Area

Mrs. Castle: asked the President of the Board of Trade why he has excluded Blackburn from the proposed new Development Area in North-East Lancashire.

Mr. P. Thorneycroft: Blackburn does not in my view qualify for scheduling under Section 7 of the Distribution of Industry Act, 1945, under the principles which were laid down in the White Paper on Distribution of Industry (Cmd, 7540) published in 1948, and with which I am in general agreement.

Mrs. Castle: Is the right hon. Gentleman aware that the population of this important town has been steadily declining; that as a result of the textile slump there has been an additional loss of population in the last year of some 1,700 people, most of whom are young men, and that if the young men drift away because other industries are not provided, then the young women will go with them too—one of the natural phenomena the President of the Board of Trade may not have noticed—and we therefore shall not he able to man-up or woman-up the cotton industry?

Mr. Thorneycroft: While sympathising with the hon. Lady's difficulties in this matter, I would point out to her that there are a large number of textile towns more dependent upon the textile industry than Blackburn, and that if I were to start extending special forms of Government assistance to such a municipality as Blackburn I should have to extend them very widely indeed.

Mr. Assheton: As, in spite of the efforts the Government made in the spring of this year to improve the situation, unemployment is still heavy in Blackburn, which the President of the Board of Trade has seen fit to exclude from his new Development Area, would my right hon. Friend give an undertaking that he will support all applications which are reasonable from Blackburn for building development and for building licences?

Mr. Thorneycroft: I hope I shall always support everything that is reasonable

that is put forward from Blackburn or elsewhere, but I must tell my right hon. Friend that if we were to start extending a development area to places such as Blackburn there is no particular reason why we should stop there. We should have to advance over very large sections of Lancashire into places which are far more dependent upon textiles even than Blackburn, and to do that would be to undermine the real purpose of this Act.

Mrs. Castle: Is not the right hon. Gentleman aware that Blackburn was included in the list of areas which were put forward for scheduling to the President by the Joint Planning Committee for the North-East Lancashire weaving belt, which is an integrated economic unit whose problems are identical throughout the whole area; and that by scheduling merely a section of this belt he is making the problems in the rest of that area far worse than if he had not scheduled it at all?

Mr. Thorneycroft: Very large numbers of places, inside and outside Lancashire, have been suggested by that Committee and many other people for scheduling. If I were to accede to all those requests it would mean that the assistance which we could extend to areas which do really need it would become quite meaningless.

Mrs. Castle: asked the President of the Board of Trade what steps he proposes to take to help cotton towns in North-East Lancashire, such as Blackburn, which are excluded from the proposed new Development Area, to attract new industries.

Mr. P. Thorneycroft: As I stated on 29th October in a statement after Questions, the Government propose to relax somewhat the stringent limitations on factory building in some areas outside, as well as inside, Development Areas, where the outlook for employment is such that the attraction of new industries is clearly desirable. I shall certainly consider on their merits new projects for those towns of North-East Lancashire which are excluded from the proposed new Development Area.

Mrs. Castle: In view of the fact that, despite the improvement in the textile trade for which the right hon. Gentleman has just claimed such credit, unemployment in Blackburn is still about 6 per


cent., can I have his assurance that he will consider the unemployment figure in Blackburn as sufficiently serious to warrant his agreeing to all applications for licences for industrial development for new industries?

Mr. Thorneycroft: The interests of Blackburn will be considered in common with the interests of other areas both inside and outside Lancashire. If I were now to start giving pledges in respect of particular constituencies, I think I should be pressed from many quarters of the House.

Mr. Fletcher-Cooke: asked the President of the Board of Trade if he is aware that, by designating the proposed new Development Area in North-East Lancashire on such a narrow basis, he will be injuring the future development of excluded boroughs, such as Darwen; and if he will widen the basis in order that such boroughs may attract industries now artificially diverted to the Development Area.

Mr. P. Thorneycroft: I do not accept the hypothesis in the first part of my hon. Friend's Question; as regards the second part, I have already said in the statement which I made on 29th October that the Government propose to relax somewhat the stringent limitations on factory building for some areas outside, as well as inside, Development Areas where the outlook for employment is such that the attraction of new industries is clearly desirable.

Mr. Fletcher-Cooke: If the weaving area, which the hon. Lady the Member for Blackburn, East (Mrs. Castle) rightly said is a national unit, is to be cut into two in this way, does it not inevitably follow that, at least to some extent, the excluded area will be prejudiced in favour of the included area?

Mr. Thorneycroft: No, Sir. I do not think it is prejudiced. It is true that the area which has been designated is one which, in my view, requires special assistance from the Government in order to help it secure some diversification. I have decided to give it that help if the House agrees, and I believe it would be wrong to take away from that assistance by spreading the area so widely as to make the help really meaningless.

Mr. H. Hynd: If the President of the Board of Trade is determined not to extend the Development Area at the moment, will he at any rate, when he is giving the special assistance which he forecast in his statement to the House, bear especially in mind the rest of the weaving area which was recommended to his attention by the North-East Lancashire Development Council?

Mr. Thorneycroft: I shall, of course, consider each town inside and outside the weaving area on its merits in deciding whether that special additional help should be extended.

Nylon Stockings (Price Control)

Mr. Burden: asked the President of the Board of Trade if he will remove price control from all nylon stockings and in particular from imported nylons as from 1st January, 1953, when importations are to recommence.

Mr. P. Thorneycroft: No, Sir. Nylon stockings are still scarce. Exports are again increasing and imports next year are likely to be very small. In these circumstances therefore, I do not think that I should be justified in removing price control.

Mr. Burden: Is the President aware that if nylons are to be imported next year the duty and Purchase Tax will make the cost so high that it will be impossible to sell them within the controlled price, and that nylons thus imported are likely to find their way into the black market, especially in view of the recent shortage?

Mr. Thorneycroft: If there is a question about what level the price control ought to be, perhaps the hon. Gentleman will put it down. The Question here is whether I should remove it. I try to remove price controls where I think they are doing no good, but I think that in this case they are still necessary.

Mrs. Mann: Is the President aware that his refusal to remove price control will be gratefully received by the women of this country, and that if he has to endure any pain from his own party in respect of the stand which he has taken many of us on this side will be willing to give him an analgesic?

Rubber and Tin (Exports to U.S.S.R. and China)

Mr. J. Hynd: asked the President of the Board of Trade how far the increase in exports of rubber and tin from the United Kingdom and British Colonies to the Union of Soviet Socialist Republics and China during the current year represents a change of policy on the part of Her Majesty's Government.

Mr. P. Thorneycroft: There has been no change of policy. During the current year there have been no exports of rubber or tin from the United Kingdom and British Colonial Territories to China.
As regards rubber shipments to Russia, I explained in my reply to the Question asked by the hon. Member on 23rd October that the apparent increase results from an accumulation of rubber which was licensed last year but shipment of which was delayed. The shipments of tin to Russia are insignificant.

Mr. Hynd: The Minister's previous reply did not indicate that the whole increase was due to that fact. If he says that there has been no change in policy, does he not recall the many protestations made by his right hon. and hon. Friends on this matter when they alleged that these exports to Russia and the satellite countries were being used for the purpose of destroying British lives in Korea and Malaya? If this is not a change of policy, are we to take it that the Government are collaborating with Russia in this nefarious trade?

Mr. Thorneycroft: I think that the hon. Gentleman is a little confused. The criticisms that were made at one time by the Conservative Party, then in Opposition, were about rubber exports to China. As I have said, there are no such exports at the present time, and with regard to exports to Russia, allowing for the backlog which I mentioned, they are running at the same rate approximately as in 1950.

Mr. S. Silverman: Will the right hon. Gentleman bear in mind that in these two territories there are living some 800 million people, and that if the Government are serious in their belief of the necessity to rebuild world trade, it will be found that it is not possible to do so by keeping these 800 million people in isolation from the rest of the world?

Mr. Thorneycroft: I am as desirous as anyone of seeking to rebuild world trade, but in the process it is not possible to ignore all the important strategic considerations.

Brazilian Cotton (Barter Deal)

Mr. K. Thompson: asked the President of the Board of Trade (1) at what price in sterling and in cruzeiros the cotton taken from Brazil in the recently negotiated compensation deal was valued; and how this price compares with prices quoted at the latest convenient date for similar American cotton;
(2) what representations were made to him before negotiations were completed for the sale by Hawker-Siddeley Aircraft Limited of jet aeroplanes to Brazil on a compensation basis in return for the sale to Britain of Brazilian cotton; and what conditions or qualifications accompanied his approval of the deal;
(3) to what extent his Department has varied its attitude to compensation trade with Brazil; and how far consideration is being given to negotiating a settlement of Brazil's indebtedness to this country using the cotton stocks of Brazil as a basis.

Mr. Erroll: asked the President of the Board of Trade to make a statement on the barter deal with Brazil whereby the Raw Cotton Commission is accepting Brazilian cotton in exchange for British jet-fighter aircraft which are being exported to Brazil.

Mr. P. Thorneycroft: I welcome the opportunity of making a statement on this matter. While the problems which have arisen in our trade with Brazil are serious and we are giving them anxious thought, they need in our view more fundamental remedies than compensation deals.
This proposed deal which, as far as I know, has not yet been concluded, is not a transaction between Governments. The point I was asked to decide was whether, if the Hawker Siddeley Group could dispose of aircraft to Brazil on suitable terms, and if the Raw Cotton Commission could agree terms for the purchase of Brazilian cotton, I would take steps to stop the transaction.
There would only have been two ways of intervening. Either Her Majesty's


Government would have had to refuse an export licence for the sale of aircraft to a friendly country to which no security objections apply, or else a direction would have had to be issued to the Raw Cotton Commission interfering with their freedom to buy when and where they think it commercially desirable.
Both of these steps would have been very difficult to justify, if, indeed, a direction to the Raw Cotton Commission in this case would have fallen within the provisions of the Cotton (Centralised Buying) Act, 1947. While, as I have said, barter deals are no solution to our trade problems, I did not think that the disadvantages of this particular transaction were such as to justify intervention.

Mr. Thompson: Leaving aside the merits or demerits of barter or compensation transactions, is my right hon. Friend aware that this deal has been negotiated in terms which imply that it is possible to get agreement on the rate of exchange between Brazil's currency and Britain's currency? Does not that suggest that the Board of Trade might do something on the same line on a larger scale, to free all channels of trade?

Mr. Thorneycroft: If my hon. Friend is suggesting that I should take this deal as an example and go out and try to get barter and compensation deals all over the world, the general criticism which has been directed to this isolated and rather defensible deal is my best answer to him.

Mr. Erroll: Does my right hon. Friend realise that, by countenancing this deal, he is permitting a very important and considerable change to take place in this country's system of exchange control [HON. MEMBERS: "Why not?"]—thereby allowing any exporter to decide how his foreign exchange earnings may be handed over to a would-be importer? If this is to be the policy of Her Majesty's Government, I hope that the widest publicity will be given to it.

Mr. Thorneycroft: There is no change in the policy of Her Majesty's Government. As I said in answer to the Question, it seems quite clear to me that barter and compensation deals in general will not provide a solution to our problems. The point I had to decide here was a much more limited one. It was whether,

in this case, we should either refuse an export licence for some aircraft or give a very special and hardly defensible direction to the Raw Cotton Commission as to how it should buy its cotton. In all the circumstances, I considered that, on balance, and in this case, I should not be justified in taking that course.

Mr. G. R. Strauss: Will the right hon. Gentleman consider another aspect of the deal? In view of the Prime Minister's criticism of the late Government for permitting the export from this country of military planes to South America and elsewhere—[HON. MEMBERS: "To Russia."]—will he draw the attention of his right hon. Friend to the fact that Her Majesty's present Government are pursuing exactly the same policy?

Mr. Thorneycroft: It rather depends on what one means by "elsewhere."

Mr. Strauss: Is the right hon. Gentleman aware that the criticism was that we were doing something wrong by allowing any military planes to leave the country, whereas, as a result of that, our aircraft industry has been built up? Now Her Majesty's Government are pursuing exactly the same policy.

Mr. Thorneycroft: It does not seem to me that there is any very clear comparison between the two.

Mr. Erroll: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

Argentina (Trade Negotiations)

Mr. Osborne: asked the President of the Board of Trade to make a statement on the trade negotiations which have been going on since February in the Argentine; and what are the main obstacles to an early settlement.

Mr. P. Thorneycroft: The negotiations which both Governments were required to hold under the Agreement on Trade and Payments concluded with Argentina on 27th June, 1949, and the Protocol to this Agreement of 23rd April, 1951, have been somewhat delayed by the examination of outstanding points in the Protocol and by changes in the Argentine Cabinet. But we have recently exchanged comprehensive proposals with the Argentines and


at the request of Her Majesty's Ambassador, representatives of the Treasury and the Board of Trade have now gone to Argentina to assist in the negotiations.

Mr. Osborne: First, are the difficulties mainly financial and to do with the old transactions or are they mainly to do with current and future trade? Secondly, are the problems respecting trade mostly to do with the price we have to pay for meat or the price we are asking the Argentine to pay for our coal?

Mr. Thorneycroft: The best service that hon. Member can render to secure a satisfactory outcome would be not to press me for details of the negotiations at this stage.

Children's Garments (Shrink Resistance)

Lieut.-Colonel Lipton: asked the President of the Board of Trade what steps he is taking to encourage manufacturers of children's clothing to use shrink-resisting materials.

Mr. P. Thorneycroft: A number of manufacturers already use shrink-resistant materials in children's garments, and resistance to shrinkage is one of the points being considered in the preparation of British standards for cotton and rayon fabrics. The Board of Trade's part in this is to sponsor standards of this kind so that customers can be given sufficient information to enable them to exercise their freedom of choice in an informed manner.

Lieut.-Colonel Lipton: Does the President realise how much parents suffer financially because clothes shrink before growing children get all the wear and tear out of them? As it would not be seemly for me to display it now, will he examine a horrible example which I will send to him?

Mr. Thorneycroft: The President of the Board of Trade is very well aware of these problems.

Ministry Statistics Division (Staff)

Mr. Burden: asked the President of the Board of Trade why the Statistics Division of his Department has increased from 1,331 in 1951–52 to 1,379 in 1952–53.

Mr. P. Thorneycroft: The figures quoted by my hon. Friend were staff forecasts used for the purpose of preparing the estimates for the two financial years in question. In the figure for 1952–53 allowance had to be made for additional staff needed to prepare the results of the 1951 Census of Production. In the event, this addition was offset by reductions which it was found possible to make elsewhere in the Statistics Division, and the actual numbers employed fell from 1,328 on 1st April, 1951, to 1,314 on 1st April, 1952, and to 1,115 on 1st November this year. I expect that by the end of the coming financial year the number will have fallen to about 700.

Italian Stilettos

Lieut.-Colonel Lipton: asked the President of the Board of Trade the value and number of stilettos imported from Italy during the past year for retail distribution in the United Kingdom.

Mr. P. Thorneycroft: I regret that this information is not available. Imports of stilettos are not recorded separately in the official trade statistics.

Lieut.-Colonel Lipton: Is the President aware that large quantities of these lethal weapons have been sold up and down the country, and is it not sheer madness, or stupidity, or both, to allow these imports to continue at a time when the public is really concerned about crimes of violence and about coshes, an example of which has been brought into the House by the hon. Member for Orpington (Sir W. Smithers)?

Mr. H. Hynd: On a point of order. Is it in order, Sir, for an hon. Member to bring an offensive weapon into the House.

Mr. Speaker: It is not in order to bring weapons into the House. [HON. MEMBERS: "Take it out."] I could not see from this distance whether it was a real one or a sham one, but if it is a real weapon it ought to be taken out immediately.

Sir W. Smithers: Further to that point of order, Mr. Speaker, may I ask the President of the Board of Trade if he will stop the sale of these articles—[HON. MEMBERS: "Take it out."]—because, if they are not allowed in the House, why should they be allowed in the home?

Mr. Speaker: That is not a question for me. What I have to do is to maintain the rules of order which prohibit the bringing of weapons into the House. I must ask the hon. Member to take it out immediately.

Sir W. Smithers: It is a sham, but by filling it with sand it can be made into a lethal weapon.

Mr. Thorneycroft: These articles are imported under a general quota which really covers stationery, and questions with regard to lethal weapons are not, of course, a matter for me but for my right hon. and learned Friend the Home Secretary.

Lieut.-Colonel Lipton: Would it be in order if I reported the answer which I have just had from the President of the Board of Trade to the Home Secretary, so that he can take appropriate action?

Mr. Speaker: The hon. and gallant Member must use his own discretion as to that.

Exports to Australia

Mr. Russell: asked the President of the Board of Trade the value of the total exports of bottle-washing machinery to Australia in 1950, 1951 and 1952 to the latest convenient date; and if he will make representations to the Australian Government against their refusal to issue further licences.

Mr. P. Thorneycroft: I regret that this information is not available. Bottle-washing machinery is not separately distinguished in the official trade statistics. My Department have written to the manufacturers who are, I understand, principally concerned, and the United Kingdom Senior Trade Commissioner in Australia has been asked to make inquiries. When I have his report the matter can be considered further.

Mr. Awbery: asked the President of the Board of Trade to what extent exports to Australia have fallen during the past nine months as compared with the equivalent period last year; and what are the chief industries affected in this country.

Mr. P. Thorneycroft: United Kingdom exports to Australia during the first nine months of this year were valued at £179 million compared with £222 million in

the corresponding period of 1951. A wide range of industries was affected, but the decline in exports was particularly marked in the textiles group and in the motor industry.

Mr. Awbery: What action is the right hon. Gentleman taking now to provide work for the people thrown out of employment as the result of the loss of orders from Australia?

Mr. Thorneycroft: These questions of intra-Imperial trade will be among those which will fall to be discussed during the forthcoming conference.

Newsprint Supplies

Sir I. Fraser: asked the Secretary for Overseas Trade, as representing the Chancellor of the Duchy of Lancaster, what is the present supply position of newsprint and the prospects for the remainder of the year and for the new year.

The Secretary for Overseas Trade (Mr. H. R. Mackeson): Supplies of newsprint in the United Kingdom should be sufficient to meet all requirements between now and the end of the year. During the first half of 1953 supplies should be sufficient to maintain the present average level of consumption. Arrangements for the second half of 1953 have not yet been completed.

Newspaper Contents Bills

Mr. Hurd: asked the Secretary for Overseas Trade, as representing the Chancellor of the Duchy of Lancaster, if he will remove the ban on the use of printed contents bills by newspapers.

Mr. Mackeson: No. My noble Friend does not consider that the supply position justifies the removal at present of this restriction on the use of newsprint.

Mr. Hurd: Can my hon. Friend tell us what saving of paper is, in fact, effected by having these rather smudgy contents bills instead of decently printed ones?

Mr. Mackeson: Not without notice.

International Materials Conference

Mr. Chetwynd: asked the Secretary for Overseas Trade, as representing the Chancellor of the Duchy of Lancaster,


whether he will make a statement on the work of the International Materials Conference during the past year.

Mr. Mackeson: As the answer is long, with the hon. Member's permission I will circulate it in the OFFICIAL REPORT.

Mr. Chetwynd: Could the Minister say whether the Conference is in abeyance, and whether any action is being contemplated to deal with the purchasing and allocation of scarce raw materials in the future?

Mr. Mackeson: No, Sir, it is not in abeyance. Some of the committees are not continuing, but the Conference is continuing.

Following is the answer:
During the past year the various committees of the International Materials Conference have continued their work of reviewing the production, consumption and distribution of a number of the more important raw materials. Where these have remained in short supply, allocation to consuming countries has been continued; thus copper, sulphur, tungsten, molybdenum, nickel and cobalt are still being allocated on an international basis.
Measures to conserve supplies have also been considered and many participating countries have adopted direct or indirect controls effecting economies in the consumption of these materials.
Some of the committees are making studies of the long-term problems of a number of commodities and considering what recommendations can be made to increase production over a period of years.
The supply position of zinc and newsprint has improved sufficiently to enable allocations to be discontinued, and in September, the committees dealing with wool, cotton and cotton linters, and pulp and paper terminated their activities. The Central Group of the International Materials Conference will, however, maintain a watch on the general supply position and will be able to re-convene any committee in case of need.
My noble Friend welcomes this further opportunity of recognising the importance of the work done by the Conference in the orderly distribution of scarce materials through international co-operation and the exchange of information on problems of common concern.

Cotton Commission (Members' Activities)

Mr. H. Wilson: asked the Secretary for Overseas Trade as representing the Chancellor of the Duchy of Lancaster, how many of the persons appointed by the Minister as independent members of the Raw Cotton Commission are actively

engaged in storing or warehousing cotton on behalf of the Commission; and how far such activities act as a bar to appointment.

Mr. Mackeson: None, Sir. The Cotton (Centralised Buying) Act of 1947 lays jointly upon my noble Friend and my right hon. Friend the President of the Board of Trade the duty of satisfying themselves that any person whom they appoint as an independent member of the Raw Cotton Commission has no such financial or commercial interest as is likely to affect him in the discharge of his functions.
This limitation does not apply to the part-time members.

Mr. Wilson: Is it not a fact that one of the newly appointed independent members of this Commission is largely engaged on storehouse and warehouse activities for the Raw Cotton Commission, and is he not aware that one of the purposes of having independent members was to represent the interests of the public and the consumer? Is he satisfied that that is being done?

Mr. Mackeson: The right hon. Gentleman asked me about independent members, and the conditions about part-time members continue as was the case under him and his immediate successor. On the point I think the right hon. Gentleman is making, there are two representative of the operatives and the intention of the 1947 Act was that part-time members should have expert knowledge of the industry.

Mr. Wilson: While I am sure the hon. Member does not want to mislead the House, is it not a fact that one of the part-time members who has been appointed is a contractor of the Commission, and is not that a clear change compared with the policy followed by the previous Government?

Mr. Mackeson: No, Sir, I do not think there is any change of policy.

Mrs. Braddock: Is the Minister aware that it is being stated that the gentleman who has just been appointed to take the place of somebody else is committed to an extent of about 90 per cent. of his own private business as being business with the Raw Cotton Commission? Does he think that that is justifiable?

Mr. Mackeson: Perhaps the hon. Lady will bear in mind that this Question was aimed at the independent members. If she wants to put down a Question concerning the newly appointed part-time member, I shall be pleased to answer it.

Oral Answers to Questions — N.A.T.O. AND PACIFIC COUNCIL (CONSULTATIONS)

Mr. A. Henderson: asked the Prime Minister what arrangements have been made for joint consultations to be held between the Foreign and Defence Ministers of the North Atlantic Treaty Organisation and the recently established Pacific Council.

The Prime Minister (Mr. Winston Churchill): No such arrangements have been made.

Mr. Henderson: Does the Prime Minister not agree that, in view of the fact that both the N.A.T.O. agreement and the Pacific Pact are regional arrangements, authorised by the United Nations Charter for the maintenance of peace, it is vitally important that the closest possible consultation should take place at Ministerial level between the Governments concerned in both these regional arrangements? Will he not make representations to the Governments of the countries concerned so as to ensure that these consultations should take place?

The Prime Minister: I will consider the suggestion.

Oral Answers to Questions — HOUSE OF LORDS (REFORM)

Major Lloyd: asked the Prime Minister whether he will call an all party conference during the present Session of Parliament to consider the reform of the House of Lords.

The Prime Minister: My hon. and gallant Friend may rest assured that we shall take steps to call the conference to which his Question refers as soon as other matters of greater urgency in the present state of national affairs have been despatched.

Mr. Ellis Smith: Will the Prime Minister bear in mind that over 100 Members on this side of the House signed a Motion saying that this party would have nothing to do with such a conference?

The Prime Minister: I thought that year by year they were taking an increasing interest in the House of Lords.

Oral Answers to Questions — NATIONALISED INDUSTRIES (INTEREST ON STOCK)

Mr. Emrys Hughes: asked the Prime Minister if, to relieve the burden on nationalised industries, he will now introduce legislation to reduce the rate of interest payable on stock issued by way of compensation to the previous shareholders.

The Prime Minister: No, Sir.

Mr. Hughes: Is the Prime Minister aware that his answer will cause extreme disappointment to those who thought that his speech on the nationalisation of the railways and the compensation for shareholders was the best speech he has delivered for 41 years?

The Prime Minister: Forty-one years is a long time and I have not had time to look over a long series of speeches. I am not at all sure there are not some others I would rather pick. There is a Motion on the Paper on this subject, and I should be quite ready to deal with that Motion if it is successful in the Ballot.

[That this House notes with approval the Prime Minister's statement that he was a very old supporter of the nationalisation of railways, welcomes his disapproval of the large sum paid in compensation to the shareholders and urges him to follow this up by appointing a committee of inquiry to ascertain what measures can be taken for reducing the compensation which is a heavy burden on the railways and other nationalised industries.]

Oral Answers to Questions — EGYPTIAN STERLING BALANCES (RELEASE)

Mr. H. Hynd: asked the Chancellor of the Exchequer whether he will arrange that the proposed £5 million to be given to Egypt shall be in the form of finished cotton materials.

The Minister of State for Economic Affairs (Sir Arthur Salter): No, Sir. The hon. Member has no doubt in mind the release, which has now taken place, of £5 million from Egypt's sterling balances This release would normally not have


taken place before 1st January next under Article 3 (3) of the Sterling Releases Agreement, but, having regard to the Egyptian Government's payments difficulties, H.M. Government have advanced the date of the release as a demonstration of good will.
The Egyptian Government for their part, have agreed to expedite sterling remittances and to review sympathetically cases of hardship arising from Egypt's restrictions on sterling imports.

Mr. Hynd: Without expressing any opinion as to whether we should extend a gesture of good will to a military dictatorship, would it not be in our interests to ensure that whatever assistance we are giving to Egypt should be in a form that would benefit employment in this country?

Sir A. Salter: We have only advanced by a short time the release that was due at the beginning of next year, and we do not think that it would have been desirable, on balance, to attach the conditions the hon. Member suggests.

BUSINESS OF THE HOUSE

Mr. Attlee: May I ask the Leader of the House if he can state the business for next week?

The Lord Privy Seal (Mr. Harry Crookshank): Yes, Sir, but perhaps I might refer first to the progress of business today. I hope that it will be possible to obtain the three Second Readings and the necessary Money Resolutions in time to allow the Prayer relating to the Shops (Revocation of Winter Closing Provisions) Order, 1952, to be moved at a reasonable hour. I believe it would meet the general convenience if this hour proved to be somewhere about half-past Seven or Eight o'clock.
Next week's business will be as follows:
MONDAY, 17TH and TUESDAY, 18TH NOVEMBER—Second Reading:
Transport Bill;
Committee stage of the necessary Money Resolution.
WEDNESDAY, 19TH NOVEMBER—Committee, and remaining stages, of the Expiring Laws Continuance Bill, of which we hope to obtain the Second Reading today; Committee stages of the Public

Works Loans Bill and of the Civil Contingencies Fund Bill, of which we hope to obtain the Second Reading today; and consideration of the Motion to approve the Draft Medical Act, 1950 (Period of Employment as House Officers) Regulations Approval Order of Council, 1952.
THURSDAY, 20TH NOVEMBER—Consideration of Motions for Addresses to continue in force for one year the Supplies and Services (Transitional Powers) Act, 1945, various Defence Regulations and Enactments having effect under the Emergency Laws (Miscellaneous Provisions) Act, 1947, and Motions relating to the Patents Act, 1949, and the Registered Designs Act, 1949.
FRIDAY, 21ST NOVEMBER—Committee and remaining stages of the New Valuation Lists (Postponement) Bill, of which the Second Reading is down for today; remaining stages of the Public Works Loans Bill and the Civil Contingencies Fund Bill; and the Committee and remaining stages of the Colonial Loans Bill, of which the Second Reading is down for this Friday.

Mr. Attlee: On the right hon. Gentleman's statement about today's business, when we suggested that it would be possible to take the Prayer at 7.30 or 8 o'Clock there was a certain amount of business down for today which has since been added to. While there is no harm in hoping, I cannot say how the business will proceed.
With reference to the debate on Monday and Tuesday on the Second Reading of the Transport Bill, the right hon. Gentleman will recall that three days were afforded on the Transport Bill introduced by the Labour Government, though there was great pressure of business at the time. This is a highly controversial Measure and, as the right hon. Gentleman will have seen in the newspapers today, very strong feelings have been evoked among chambers of commerce. As it is most likely, therefore, that there will be very considerable opposition put up, probably from both sides of the House, it would be reasonable that there should be three days for the Transport Bill.
Thursday's business on the Supplies and Services (Transitional Powers) Act and various Defence Regulations is rather long and complicated, and extra time should be given for that.

Mr. Crookshank: The right hon. Gentleman is right, on the first point. Three days were given by the previous Government, but they had not produced a White Paper, and there was no discussion in the House on the fundamentals of the proposals, such as has already taken place.
As regards the emergency powers debate, the right hon. Gentleman will remember that not only last year but the year before only one day was given for this purpose. We are, therefore, following what appears to be a more or less established practice. On the other hand, I recognise, and the Government recognise, that these emergency powers are very important for discussion, and it is not an entirely unreasonable request that has been made by the right hon. Gentleman. If he likes to have it discussed through the usual channels I will be quite ready to discuss it.
I would point out that the Bills announced for consideration on Wednesday and Thursday are most urgent owing to their having to be enacted before Christmas because of the dates. It would be reasonable, if hon. Gentlemen opposite want more time for the Defence Regulations debate, for them to help us with these other matters. Perhaps that point can be discussed through the usual channels.

Mr. Attlee: Perhaps the right hon. Gentleman will discuss the matter of the time for the Transport Bill through the usual channels

Mr. Crookshank: No, Sir. I think that two days are enough.

Mr. Attlee: The Transport Bill has not to be got through before a certain date. In fact, the general opinion seems to be that it would be better if it never reached the Statute Book at all. Although there has been a White Paper, there has been also a great deal of chopping and changing in policy, and there is great confusion among the supporters of the Government and great need for clarification. This is a difficult and complicated Bill. It sets an entirely new precedent of trying to undo a nationalisation Measure. There is a strong case for the three-day debate.

Hon. Members: Answer.

Mr. Crookshank: I have answered, but if it is any satisfaction to hon. Gentlemen

opposite I will repeat the answer. In the view of the Government, two days are enough.

Mr. Walker-Smith: Would my right hon. Friend not agree that, having regard to the comparative sizes of the Transport Bill and the Transport Act, 1947, the proposed allocation of time is adequate, and perhaps even generous?

Mr. Ede: With regard to Thursday's business, may I ask whether some of the Regulations have not been considerably revised and do not exist in any easily recognisable form, and whether copies should not be placed in the Vote Office, particularly of Defence (Finance), Defence (Trading with the Enemy) and Defence (War Risks Insurance), in the form in which they actually exist at the moment?

Mr. Crookshank: I am very much obliged to the right hon. Gentleman for calling my attention to this point yesterday. I have looked into it since, and I find that this is the situation: the bulk of these Regulations are in the bound volume of 1950. It is true that the Defence (Finance) Regulations originals are in the Vote Office, but they have been so much changed that they are not very clearly distinguishable in the old papers. They will be made immediately available before the end of the week in their present form. As to the Defence (Trading with the Enemy) Regulations, these are not very much different, and are to be found in the bound volume—

Mr. Paget: They are not in the bound volume at all.

Mr. Crookshank: The reference as to where they are is to be found in a pamphlet—[Interruption.] I have been asked these very technical questions, which are not my direct responsibility and I hope I may be allowed to give the facts. There is a pamphlet "Trading with the Enemy, and the Peace Treaty" and in it will be found the appropriate references. These are now also available in the Vote Office to hon. Members. This leaves only the Defence (War Risks) Regulations, which do not appear in the bound volume. They are of no particular importance. They are not on the Order Paper, as the Government suggest that all of these should now lapse.

Mr. H. Morrison: If I may revert to the Transport Bill, may I put this to the Leader of the House? This Bill, which


is an undoing Bill, will, in the judgment of many hon. Members, imperil the livelihood of large numbers of workpeople engaged in road transport, railway transport, and so on. It will be the wish of many hon. Members on this side of the House, associated with a considerable number of trade unions catering for these workpeople, to contribute to the Second Reading debate.
In view of the great importance of this Bill and the fact that we gave three days to our own Transport Bill, will he reconsider the request made by my right hon. Friend the Leader of the Opposition? Otherwise there will be great disappointment, not only among hon. Members representing and associated with these trade unions, but the very large number of workers who belong to them and whose livelihood and future is vitally affected.

Mr. Crookshank: I am sure that all those points of view can be put within the compass of a two-day debate. [HON. MEMBERS: "No."] When the right hon. Gentleman says that the Transport Bill which his side introduced was given three days, what my hon. Friend the Member for Hertford (Mr. Walker-Smith) said is quite right—the only similarity is the name. This Bill is a great deal shorter than that one and there are nothing like so many points to discuss.

Mr. G. Thomas: Reverting to business, is the Minister aware that Welsh affairs have not been considered since last February. Can he say when we shall have an opportunity to discuss them?

Mr. Crookshank: I think the general understanding was that they should be discussed once a year. The Government certainly intend to continue the practice of having a debate on Welsh affairs, but I cannot give the date at the moment. It has also to be remembered that the report of Government action for the year ending 30th June, 1952, was only published at the end of October. Perhaps hon. Members in all quarters of the House would like a little more time to study that before we settle a date, but there will be a day.

Mr. Hollis: Can my right hon. Friend tell me when we are likely to be able to consider the Motion relating to the Statutory Instruments Select Committee?

Mr. Crookshank: If I may weary the House again, we had hoped that there might be an opportunity tonight, but in view of the fact that the Opposition wish to have a Prayer tonight, I do not propose to seek that opportunity and I hope, therefore, to move it next week. It is, of course, an important Committee which the Government, indeed, I think the whole House, desire to set up in order that Statutory Instruments may be scrutinised, and I regret it is not possible to do it yet.
I should have thought that the right way of dealing with this would be to set up the Committee, and then, as has been the practice in the past, leave the Committee, if they find their powers inadequate, to report to the House what extension of powers they require in order to carry out their duties. I put it to some hon. Gentlemen who have interested themselves in this matter that perhaps that is the wiser way of doing it. I am in the hands of the House, but we cannot take it today.

Mr. Attlee: May I ask the right hon. Gentleman, not immediately on next week's business, whether the Government will afford time for a discussion of the new proposals for the Home Guard that were outlined yesterday?

Mr. Crookshank: I do not see any early prospect of doing that.

Mr. Bevan: Adverting to the time allotted to the Transport Bill, as my right hon. Friend has already pointed out, the livelihood of a very large number of workers is affected by this Bill and there has been great agitation for direct action to stop the Bill altogether. It would be extremely unfortunate, and much more difficult to resist it, if the impression got out that Parliament itself was giving inadequate time for the discussion of the Bill.

Sir T. Moore: Industrial threats.

Mr. Bevan: Perhaps the little boys will be quiet for a moment. I should have thought that it would be much easier to resist that importunity if it is recognised that Parliament is seriously considering the interests of the workers in the matter and giving plenty of time for discussion. The failure to give plenty of time for discussion will have a sinister interpretation outside.

Mr. Shinwell: About the Home Guard, does not the right hon. Gentleman consider, in view of the somewhat drastic reorganisation that has been effected for the Home Guard, that the House is entitled to some say in the matter? Therefore, should he not consider the suggestion of my right hon. Friend that an early day might be provided for a debate, even if it is only a half day, so that we might ascertain from the Secretary of State for War his actual proposals and their consequences?

Mr. Crookshank: I did not say anything further than that there was no early prospect of a debate that I could see. I did not say that there would never be one.

Mr. Bevan: Can I have a reply?

Mr. Crookshank: The right hon. Gentleman the Member for Easington (Mr. Shinwell) got up so quickly that I had not time to reply. I really cannot amplify the answer I have given to the Leader of the Opposition. After all, two days for Second Reading does not mean that the Bill is never to be discussed again or that the points which the right hon. Gentleman has in mind cannot be raised later in the debate.

Mr. Bevan: In view of the atmosphere existing in the industry, would it not be worth while to be even over-generous in the allocation of Parliamentary time rather than give the impression that the Government are trying to hand over this loot as quickly as possible?

Mr. Crookshank: There is no reason for anybody giving such impressions anywhere.

Mr. Lewis: The Leader of the House no doubt will have seen the statement by his right hon. and gallant Friend the Minister of Food that for the second time in 12 years, and only since this Government have been in power, the people will have no Christmas food bonuses. Can he, therefore, make arrangements for a debate on that question in view of the fact that the previous Government always made arrangements for these bonuses?

Mr. Crookshank: I do not see any prospect of that.

Mr. Paget: Does the right hon. Gentleman recollect that during the Election a pledge was given to introduce permanent legislation to put the Defence Regulations on a permanent basis, that this

promise was repeated last year, and that in consideration of that promise they were given a relatively rapid passage? This year we shall certainly require to discuss these Regulations, and if the right hon. Gentleman puts legislation which he does not require by a specific date in front of legislation which he requires by a certain date, let him not come back to us and ask for mercy when he gets to that date.

Mr. Jay: Now that the right hon. Gentleman has had a day to think it over, can he tell us why he introduced two Bills in the wrong order yesterday? Was it a case of balanced flexibility or just plain confusion?

Hon. Members: Answer.

Mr. Speaker: Order. We are discussing next week's business, not yesterday's.

Mr. Jay: On a point of order. The business for today, to which the right hon. Gentleman referred, is dependent on the confusion which he created yesterday. Am I not at least entitled to an answer as to why the Government reversed the order of these Bills?

Mr. Bing: Would the Leader of the House say whether adequate time will be provided for the discussion on the Motions on Thursday on the Defence (Finance) Regulations when, and if, these are available to hon. Members?

Mr. Crookshank: I have already announced what was to be discussed on Thursday, and in response to the Leader of the Opposition I said that we would consider the matter further.

Mr. Bing: But the right hon. Gentleman will realise from the terms of the Motion that he has put down that it is not necessary that these Regulations can be brought up. Therefore, will he give time for a Resolution raising specifically the Defence (Finance) Regulations, in view of the general public interest that at the moment they arouse?

Mr. Crookshank: What is to be discussed are the Addresses which have been put on the Order Paper.

Mr. E. Fletcher: The Leader of the House said that he hoped one day next week to take the Motion for the appointment of the Statutory Instruments Committee, but he did not say which day next week. Can he say on which day next week that will come up?

Mr. Crookshank: I cannot say today.

Orders of the Day — NEW VALUATION LISTS (POSTPONEMENT) BILL

Order for Second Reading read.

3.52 p.m.

The Minister of Housing and Local Government (Mr. Harold Macmillan): I beg to move, "That the Bill be now read a Second time."
I have heard it confidently asserted that there are people who fully understand the principles underlying rating and valuation. It has even been affirmed that there are some who understand, in addition, the application of these principles in practice. Whether this be true or not, I have no means of judging, but fortunately, for the purpose of introducing the Bill, knowledge so profound and so extensive is not necessary. On this occasion, the traditional affectation of Ministerial omniscience would be out of place. For the purposes of the Bill, it is not really necessary to understand all the details of rating and valuation, since all that the Bill does is to postpone the date by which that valuation has to be made.

Mr. Charles Pannell: And perpetuate all the anomalies.

Mr. Macmillan: There has been no complete revaluation for rating purposes in England and Wales since 1934, and some sceptics in the Press and outside have suggested that no revaluation would ever take place. That is an unduly pessimistic view. The work must be done as soon as possible, but after so many pitfalls and disappointments, I hesitate to give a definite date. We are very anxious, if possible, to get it finished by 1955 or, at the latest, by 1956.
I ought to remind the House of the circumstances in which this new valuation is to be attempted. In the past, as hon. Members know well, local valuations for rating purposes were made by the local authorities. In the Local Government Act, 1948, it was provided that this work should be transferred to the Board of Inland Revenue. The object of centralising the work was a double one. First, it was believed that it would be more easily carried out, and second—this is, perhaps, the more important—the uniformity of valuation was regarded

as essential. According to the 1948 Act, new lists should have been ready by April, 1952, but power was given to the Minister to make an order deferring their introduction until April, 1953, but not later.
It has been for some time apparent, even to the most sanguine advisers of successive Ministers, that there was no hope that these valuations could be ready even by the latest legal date of April, 1953. Warnings were, therefore, given in August of last year by my predecessor that further delay might become necessary. Those warnings were repeated by me in March and August of this year. Following these warnings, there comes the Bill.
The fact is that the valuation officers of the Board of Inland Revenue will shortly be in breach of their statutory duty—that is the phrase given to me to describe what they have done. It is, indeed, a dreadful thought that such a respected and respectable body of men should be in this position, and I hasten to explain that it is by no fault or default of theirs. What will happen, since they were required by the Act to sign and settle the valuation lists by 31st December of this year, is that this will not be possible. As a result, no legal rating lists will be in existence, and I am informed, therefore, that no rates could be levied by local authorities unless a Bill of this kind were passed.
I must confess that when the news was broken to me, I was sorely tempted to-allow this interesting, and in some respects not altogether disagreeable, experiment to proceed. No valuation lists, no rates—what a wonderful cry for the next local elections. What remarkable results would follow, and what number of victories and defeats. On the whole, however, that would not do, for if there were no rating lists there could be no legally levied rates. There would, therefore, be no funds or resources to support the work of the local authorities, and great inconvenience, not to say hardship, would follow to all their citizens.
The only thing to do is to make it legal to levy the rates upon the old lists for a few years longer until the new lists are completed. That is, in effect, what the Bill provides. The Bill empowers the Minister to make Orders prescribing later dates for the completion of the revaluation than those set out in the 1948 Act.
It may be asked why there are no new valuation lists, why this great mechanism of Government has broken down, and why this path, so confidently entered upon in 1948, proved so tortuous and stony. That is a very fair question. Some of the dangers were, I think, foreseen by some of the critics of the 1948 Act. I speak with complete detachment, because although I was in the House at that time I did not follow very closely the passage of the Bill. I am, therefore, not trying to be wise after the event, but I think that the real reason is that there have not been enough valuers.
The local authorities had in the past sufficient staff for day-to-day work and for new or altered valuations, but they could never have done the additional work with their own staff, even if it had been left with them. They would have had to engage a staff specially for the purpose of a complete re-valuation. The Board of Inland Revenue have been faced with many diverse tasks during recent years. There has been a lack of qualified valuers and these gentlemen do not grow, as it were, upon every tree; it is a highly trained and specialised profession. Qualified valuers, I am told, have been fully employed, both inside and outside the public service, during these postwar years, for there has never been, it seems, so great a call upon their services, or a call upon so large a scale.
Apart from war damage and all that, there was, of course, another Act passed only a year before the 1948 Act which has led to valuation on a prodigious scale. Under the Town and Country Planning Act, 1947, there has been compiled what amounts to a complete Doomsday Book of development charge compensation claims, assessment of future development rights and mineral valuations. All these have had to go together at the same time and often in competition with one another. So the work of a complete re-valuation for local rating has not been possible.
It may be asked whether the lack of valuers is the only reason. It is the main reason, it is a sufficient reason, but it would be disingenuous to suggest that it is the only reason for all this trouble. On 1st August I informed the House:
Difficulties have been encountered in assessing dwelling-houses in accordance with

the provisions of the Local Government Act, 1948. …"—[OFFICIAL REPORT, 1st August. 1952; Vol. 504, c. 209.]
I do not want to go into any detail in this matter now, because it is hardly relevant to the very narrow purpose of this Bill, but I ought to say that the novel provisions of Part IV of the 1948 Act have resulted in certain complications.
Hon. Members may recall that these provisions arrange for a new method of valuing post-1918 dwelling-houses in accordance with a formula related to their estimated cost of construction in 1938. As valuation has proceeded over the various classes of houses, considerable inconsistencies have revealed themselves, and when the results have been tested by some trials it has been found that rather unlikely results have been given by the new formula, results which can hardly be defended as coming into an equitable valuation as between different classes of houses.
What has happened is that the older houses have emerged from the tests of revaluation we have made with proportionately higher assessments than the newer ones and this quite irrespective of the merits of the house or the accommodation provided. There have been other results of a similar character which make one feel that these problems have somehow got to be overcome, and that there is a need not merely to postpone the coming into effect of the re-valuation but to consider very carefully whether in this respect some amending formula will have to be found.

Mr. Aneurin Bevan: Will the right hon. Gentleman explain that in a little more detail, because in my recollection—I was responsible for this legislation—there was nothing in the Act itself that would give rise to this result. It may have been the interpretation of the Act by the Inland Revenue officers, but nothing in the statute itself ought to give rise to these discrepancies.

Mr. Macmillan: I am not trying to attack the Act. It was a difficult thing to apply. So far as we have been able to work on this part of it, with all the other reasons I have given why it has taken a long time to start, these tests have been made and the formula—at least as it is being applied—has been found to produce unsatisfactory results.
All I am saying now is that, as it cannot be done anyway by 31st December of this year and as anyway we need to have a postponement, it gives an opportunity for looking round and making quite sure that when the full task of valuing this particular class of dwelling-house is taken up again, the formula shall be a fair and a sound one. No one would like the result to work out in a way which is not equitable between two sets of people living, perhaps, in the same street and in similar accommodation.

Mr. J. A. Sparks: Do the Board of Inland Revenue contemplate changing the basis of valuation lists?

Mr. Macmillan: As I told the House in reply to a Question in August, I contemplate using the time to see whether this matter can be overcome, possibly as the right hon. Member for Ebbw Vale (Mr. Bevan) suggests, by a different application of the precise regulation, or possibly it will require some amendment of the provisions themselves. Meanwhile, it is true to say that these difficulties have only emerged in regard to this class of dwelling-house. Therefore, the valuations of shops and other forms of property can proceed and are proceeding. Those valuations are going along with the staff which is available. Consequently, I think that in the long run no time will be lost, because a great part of the work can proceed on the original plan.
I want to make it clear that this is not a Bill to amend the basis of valuation. It may be necessary to do so; I hope it may not, but I think it may be. This is not a Bill to set up a new basis of dwelling-house valuation and certainly not a Bill in which we are considering who should undertake this re-valuation.

Mr. Pannell: The right hon. Member said that this is not a Bill to amend the basis of valuation but he went on to say that this may be amended, or words to that effect. Are we, then, to take it that this is a Bill to give a breathing space in which to consider amendment of the 1948 Act?

Mr. Macmillan: I ought to be quite fair. I have presented the Bill merely on the physical fact that these valuers cannot do the work even if they follow the precise formula they have been following up to now; it just cannot be done because of these other things; but I think

it would not be honourable at the same time not to tell the House that this difficulty, this snag, has shown itself. Therefore, I say no more than that, as there is to be a delay, it will be reasonable, surely, to get the best possible advice as to whether some amendment of the formula may be obtained—[An HON. MEMBER: "It will take time."] No, because they will go on with the shops and offices.

Mr. Douglas Houghton: Has the right hon. Gentleman overlooked the reply he gave on 1st August, when he forecast revision of the 1948 Act, as far as could be inferred from the Question, in relation to the basis of valuation?

Mr. Macmillan: I am informed that it will certainly be necessary, but I will look at it again—this is the first time I have had the useful suggestion which was made by the right hon. Member for Ebbw Vale, who introduced the Measure—and see whether, within the four corners of the actual Section, it might be possible to get the amendment of application which is desirable. If it is not, there will have to be an amendment, because no one would wish an unfair or inequitable result to be forthcoming.
Therefore, since this Bill has to be brought forward anyway because the valuation cannot physically be done anything like by December of this year, and since it is quite a big job to obtain valuers and all the rest of the people needed for the purpose, it seems only reasonable, as I forecast and as I was informed by my advisers in August would be necessary, to see whether we can alter the formula within the actual four corners of the law.

Mr. Edward Shackleton: The right hon. Gentleman must be aware that the Inland Revenue Department have stated in correspondence that the Minister proposes by legislation to alter the method of assessment of houses.

Mr. Macmillan: The right hon. Member for Ebbw Vale suggested that what we should do is alter the working of the formula. He suggested to me that it could, in his view, be done within the Act. Therefore, I accepted that, as I think it was courteous to do, and I say that I will certainly look into that possibility; it is a new one to me. If it proves to be


unworkable, we shall have to introduce an amendment; if it proves to be workable it will save me and this House a great deal of trouble, because we shall be able to get a result which is fair without an amendment of the law.
Meanwhile, since the valuation, as I say, cannot physically be done—there is no possibility of it—the sole purpose of this Bill is to postpone the legal requirement in order to avoid what I have explained would be the tragic and impossible situation that there would be no legal basis for the raising of rates. Probably anybody could go to court and prove that he was not liable for rates, with, therefore, a corresponding breakdown in the whole system of local government.
I hope that the House will think it right to pass this Bill. I thank the right hon. Gentleman for the suggestion he has made, which may be helpful, and I will look at the matter again carefully. In any event, it will be necessary to achieve the result of getting a fair balance and equitable valuation between the pre-1918 houses and the post-1918 houses by whatever means it may be necessary to achieve that purpose.

4.12 p.m.

Mr. Hugh Dalton: We find rather obscure in some respects what is proposed to be done. The Bill looks simple, but, as the Minister has discussed he issues, I think that the complexities have grown, and I know that a number of my hon. Friends who have spoken to me on the matter, I having been the previous occupant of the office which the Minister now holds, are disturbed at various aspects of it, and some of them wish to raise questions over a wider field and in more detail than I do now.
This position is very disappointing. We thought that the 1948 Act, which my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) steered through the House, and with which I also had something to do, particularly as regards the equalisation grant formula, was very important. It came to me as a personal disappointment when I became Minister that some difficulties seemed to be arising even then as to the speed of the re-valuation, but I say frankly to the right hon. Gentleman that, when I was considering this, I

never contemplated a total postponement such as is proposed in this Bill.
I thought that as regards rateable properties other than dwelling-houses—shops, business premises and industrial hereditaments generally—we could press on with the re-valuation without any need for postponing all that part of the new lists; that it might be necessary to have a Measure relating solely to dwellinghouses—some measure of postponement in respect of them. What I find very disappointing is that postponement covers all other hereditaments as well.
Inequities which arise between one authority and another in the absence of uniformity of assessment, to which the right hon. Gentleman referred, are more serious in regard to commercial and industrial hereditaments and business premises than in regard to dwelling-houses. Therefore, it was my hope, when I was the responsible Minister, that if there was some difficulty in completing the whole operation by the date laid down by the Act, any postponement would be limited to dwelling-houses or even perhaps only to some sections of dwelling-houses, and that postponement would not be required in the case of business premises and industrial hereditaments. That is the first ground on which I say it is very disappointing to find that a total postponement of all these valuations is being proposed.
In the second place, it is quite true that when I was the Minister concerned, I was told, and I am sure it was correct, that valuers were scarce, that there were not enough of these Inland Revenue experts to do the job in the time. Let us suppose that that is so. Word reaches me—the right hon. Gentleman did not refer to it, but we wish to know the answer—that although the ground for postponement was that there was not enough manpower available, manpower is in fact now being discharged, that a large number of estimators have been dismissed as redundant or are under notice to quit.
I shall not go into great detail on this, I know less about the details than do some of my hon. Friends, but it is surely a very anomalous position to base a case for postponement on the ground that there is not enough staff at a time when the staff is being cut down and people who have this skill and technical ability


are being dismissed. The Minister shakes his head, but we shall require a straight answer on this question with regard to details which may be deployed by later speakers.

Sir Geoffrey Hutchinson: Will the right hon. Gentleman allow me to ask him a question?

Mr. Dalton: I am asking a question, and I do not wish to give way at this stage. I am not the Minister responsible any longer. If the hon. and learned Member will excuse me, I am putting a question to the responsible Minister. I ask why is he sacking staff if he says that there must be this postponement because he cannot get enough staff? At first sight that is a very odd situation.
I am further told that, if one takes the staff of the Valuation Office, the expenditure on them is due to increase in the present year. According to the Estimates of the Valuation Department, there is apparently to be a reduction in staff but an increase in expenditure. This, again, is a matter on which we should like a little explanation. Does it mean that the salaries of the higher officials are being increased and the lower-paid people are being dispensed with? Is that what it means? If not, what does it mean?
Then there is the question of the possibility of changing the basis of assessment. I have again read carefully today the answer which the right hon. Gentleman gave on 1st August, in which he said:
Difficulties have been encountered in assessing dwelling-houses … and it has become clear to the Government that Parliament will, in due course, have to be asked to amend these provisions.
I take it that the right hon. Gentleman would judge that that is covered by the Bill now before us—the provisions in respect of the date of valuation. I suppose that is what he had in mind. But that reply continues:
It is intended that the basis should still be pre-war value. Valuation staff will shortly be employed on preliminary work to enable the Government to formulate proposals."—[OFFICIAL REPORT, 1st August, 1952; Vol. 504, c. 209.]
That, again, was a little obscure.
On what basis is this preliminary work being done? Are a number of these scarce valuers now being employed on a

new valuation which has no statutory basis, the Government themselves being still in doubt as to whether they intend or not to give it a statutory basis by means of a new Bill? It appears at first sight that a great deal of work that has already been done will have been wasted, that a lot of work on which the staff have been engaged for a number of years on the existing basis will have to be scrapped and that staff are now working on some basis which is not clearly defined and has no statutory authority; and that the Government may or may not adopt the latter basis in a Bill to be brought before this House. It is a purely experimental departmental basis on which that work is being done. I am sure that the right hon. Gentleman will agree with me that a little further elucidation is very much called for, perhaps from the Parliamentary Secretary later.
I turn for a moment to one matter affected by this Bill, because one of the causes for the carrying through of the valuation on the basis laid down in the 1948 Act was, so to speak, to underpin with equity the operation of the new grant formula which my right hon. Friend and I took some trouble in devising. I venture to assert that it would not be easy to find a formula more equitable than that, subject to two qualifications.
The first is that we have uniform valuations throughout the country, because it is evident that, if one local authority under-values its properties, it will not only be getting more than its fair share under the formula—it will be cheating—but in addition it will reduce the rateable value per head throughout the country. That will not only give it more than its share, but also will give other authorities less than their fair share, and the whole thing will operate in an inequitable manner. That is why in 1948 many of us were impressed with the need for uniformity and a nationally arranged valuation.
There is another aspect to which my hon. Friend the Member for Leeds, West (Mr. Pannell) drew attention, and which I will mention in order to complete the picture, namely, whether in the grant distribution according to the formula all the areas in receipt of the grant are equitably chosen. It may be argued that the formula will not work with complete equity in some cases unless there is some


reconsideration, particularly in the case of what I might call heterogeneously composed counties which include areas of widely varying rateable value. Unless some of these areas are re-classified it will not be entirely equitable. But I do not wish to deal with that point of length. My hon. Friends may say something about it later on.
This postponement is exceedingly regrettable, and we should like to hear a great deal more about the reasons why it is necessary. I should like to know why the right hon. Gentleman could not have gone ahead on the lines being considered when I myself was Minister; whether we should not even now go ahead within the different areas with everything except dwelling-houses, and thereby get uniformity with regard to industrial hereditaments and shops, and so on. That would have been a great step in the right direction and a contribution to under-pinning the grant with equity as between one area and another. I should still like that to be considered, and also whether at any rate so long a delay as is now proposed is really necessary for the industrial hereditaments and shops. I cannot believe it is.
Further, we should like to know a great deal more about what is happening to the staff, and whether it is the case that staff have been dismissed; and if so, how that is helping in the work of completing this long overdue task. Those are the principal matters which have occurred to me in listening to the right hon. Gentleman. This is a very harmless-looking little Bill. At first sight one cannot read much into it. One has to listen, and ponder, and speculate, and then all sorts of thoughts gradually emerge after discussion and reflection. I hope we may have an answer to the questions I have put, and also to other questions which I have no doubt my hon. Friends will put during the ensuing debate.

4.24 p.m.

Mr. Derek Walker-Smith: The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) has just said that the postponement proposed in this Bill is disappointing. With that I agree. I think the postponement disappoints many but, of course, it should surprise none; because when one looks at Section 34 of the Local Government

Act, 1948, one sees that the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) displayed unusual caution, for him at any rate, in fixing the date by which valuation was to be complete. Having regard to the numerous occasions on which the dogmatic pronouncements of the right hon. Gentleman have been confounded by events, it would be a little too much to hope for more where even he views the outcome with caution.
There is, in my view, a dual importance in this postponement. The first is in regard to the operation and equity of the Exchequer equalisation grant and the second in regard to the general machinery of rating and valuation. As hon. Members know, the cardinal feature of the 1948 Act was the introduction of the Exchequer equalisation grant in place of the block grant system under the Local Government Act, 1929, the grant being paid to those counties and county boroughs whose rateable value per head of the weighted population is below the national average.
It follows that, because the formula of the Exchequer equalisation grant depends on rateable value, the equitable machinery of the grant system depends on uniformity of valuation. I do not think that proposition is in issue. It was in fact admitted, or it may be it was asserted, by the right hon. Gentleman the Member for Ebbw Vale in introducing the Bill.

Mr. Bevan: I did not have to admit it: it was the basis of the legislation.

Mr. Walker-Smith: I do not know why the right hon. Gentleman should have arrived at the point of hypersensitivity at which he quarrels even with those who seek to agree with him. I suppose one must search for the explanation in recent events which I hope not to have to refer to again. The right hon. Gentleman said:
It is obvious to everybody that if we are to redistribute central assistance to local authorities by means of rateable value per head of the population, there are certain weaknesses which immediately emerge, because if the assessment of rateable value is not carried on by a uniform method, then there is a non-uniform result."—[OFFICIAL REPORT, 18th November, 1947; Vol. 444, c. 995.]
That principle was also enunciated by those of us on this side of the House who spoke in that debate. Now, to make it complete, the right hon. Gentleman the


Member for Bishop Auckland has said, in that colourful phraseology which he employs, that it is necessary to under-pin the grant system with uniformity.
But though there is that measure of agreement with regard to uniformity, it is necessary to recall what in fact was the controversy between us in 1947–48. The question we then had to consider was whether it was right to proceed with the new system depending, as is admittedly did, for its equitable operation on uniformity, when uniformity was neither achieved nor in reasonably near prospect?
That was the issue we debated in this House in November, 1947. The right hon. Gentleman and those who sat with him said "Yes," and he expected, at any rate looked forward to, uniformity by the machinery of central valuation in 1952–53. So far as the views expressed on this side of the House are concerned, perhaps I may be forgiven for quoting what I said myself, since I find on looking back something that I had forgotten with the passage of years, that I wound up that debate for the then Opposition. On that occasion I said:
What, in effect, the Minister has done in the framing of his proposals is to put the cart of equalisation grant before the horse of uniform valuation. The results of that cannot be exaggerated when we are considering this Bill because it is that inversion of the logical and proper process which has vitiated these proposals. That is the central, vital, inescapable defect of this Bill."—[OFFICIAL REPORT, 19th November, 1947; Vol. 444, c. 1198.]
An hon. Member says that it is colourful but, like Clive, I am astonished at my own moderation.

Mr. James Callaghan: Warren Hastings.

Mr. Walker-Smith: I am much obliged. I knew that it was one or the other.

Lieut.-Colonel Walter Elliot: My hon. Friend was right in his original statement. It was Clive who said that he was astonished at his own moderation. Hon. Members opposite are wrong.

Mr. Walker-Smith: The situation has developed on normal lines. A Conservative Member made an unexceptionable statement which was instantly contradicted with unusual unanimity by hon.

Gentlemen opposite but was, in due course, proved to be correct.
I am astonished at my own moderation in the circumstances of the events as they have turned out. What has happened is not only a question of putting the cart before the horse but of hitching the horse back to front even in that unusual position. The Exchequer equalisation grant system is a system of dividing the sheep from the goats—the receiving and the non-receiving authorities. The difficulty is that without uniformity we obviously get a mixed population in both sections.
At present there is a risk of too many goats receiving the grant because of under-valuation and too many sheep being denied the grant because of fair valuation. The effect of postponement is necessarily to aggravate that situation as the prospect of uniformity recedes. There are many authorities in an unfortunate position. Perhaps I may be forgiven for referring to my own county of Hertfordshire. That county is in a doubly unfortunate position in these matters.
First, as a result of this arbitrary and inequitable classification they are one of the non-receiving counties. Secondly—and in this their position is unique—they also have to bear the additional and as yet undefined burdens of certain new town expenditure. Therefore, I should like to commend the position of these counties, and especially that of Hertfordshire, to the sympathetic consideration of my right hon. Friend, having regard to the fact that Hertfordshire, financially speaking, have not only suffered from the whips of the right hon. Gentleman the Member for Ebbw Vale but the scorpions of Lord Silkin in respect of the new towns.
On the general position, it must at least be open to doubt whether even the Government majority of 1948 would have passed Part I of the 1948 Act in its present form had they realised that uniformity would be as difficult of achievement as in fact it has turned out to be.
I wish now to comment on the second aspect, which is the effect of the postponement on the general machinery of rating and valuation. I do not think that it necessarily means that centralized valuation is impractical or wrong. I


have never been dogmatic about this. I note that in the Second Reading debate on the 1948 Bill, I said, in substance, that I had an open mind on this question. But the postponement, and the reasons for it, means that central valuation could not discharge the heavy task laid on it in 1948 by the dates which were then suggested.
The fact that re-valuation and therefore uniformity have not been reached by the scheduled dates greatly weakens the case for central valuation. The Minister spoke of the reasons for the failure to complete by these dates. In substance, he gave two. The first was the shortage of trained technical valuation staff. The second was the difficulty which in practice had been found in applying the valuation code for dwelling-houses under Part IV of the Act.
On the first question, we from our side of the House gave clear warning in 1947–48 of the strain that would be imposed upon valuation machinery and staff by the double task of a new rating valuation and of the valuations which were necessary under Part VI of the Town and Country Planning Act. Therefore, it is no surprise to be told that the valuation machinery of the country has found the discharge of this double burden more than it has been able to perform.
My right hon. Friend gave a second reason about the Part IV code. Expert opinion has in some cases pronounced against the experiment of the new valuation for dwelling-houses under Part IV. The view is taken by some that the replacement of the hypothetical tenant by this series of calculations based on cost and site values is more likely to defer the prospect of an equitable uniformity than to bring it nearer.
There again, I do not wish to be dogmatic, but clearly this House is now faced, or shortly will be, by the question whether it is right in the case of dwelling-houses to seek to continue with the Part IV valuation code or to go back to the hypothetical tenant system. If it is ultimately decided, in view of expert advice and the experience that we have so far gained, that it is right to continue with Part IV valuations, then there are certain amendments which fall to be made in that valuation system which were unsuccessfully urged from our side of the House, as the

right hon. Gentleman the Member for Ebbw Vale will remember, during the Committee stage of the Local Government Bill.
When one considers the possibilities of a return to the hypothetical tenant system, my impression is that expert opinion would probably favour that system for dwelling-houses. The right hon. Gentleman the Member for Ebbw Vale poured a great deal of scorn on the hypothetical tenant in 1948. He referred to the hypothetical tenant, if I remember aright, as a fugitive and one-dimensional person whom valuers had never been able to track down. Since then he may have had second thoughts. He may have greater sympathy for the fugitive person than he had in the full plenitude of his power in 1948.
Be that as it may, there is a question which will have to be decided, and decided soon, in the light of the best advice that the Minister can receive. Of course, there was a good deal of substance in the basis of the contention of the right hon. Gentleman the Member for Ebbw Vale at that time, that the rent control system made the hypothetical tenant system very difficult to apply to small dwelling-houses. That is, of course, the centre of the problem that the Minister has to face at the present time, and I was very glad to hear my right hon. Friend say that he proposes to use this time to take expert advice and try to achieve the best solution that can be found.
I want to say a word or two in regard to whether it would now be better to go back to local valuation or to proceed with the centralised valuation. The only point that I want to make on that is that it is, of course, necessary, if the Exchequer equalisation grant system is to continue, to achieve uniformity. It is true that, up to 1948, no great degree of uniformity had been achieved by the local valuation system.
What I think the House should remember, however, is that, until the Exchequer equalisation grant system had been introduced, there was no great necessity for uniformity. It may have been desirable, but it was not necessary; and so the fact that local valuation, with the aid of county valuation committees and central valuation committees, had not succeeded in the past, up to 1948, does not necessarily mean that it would be impossible


for them to succeed if valuation reverted to the local machinery at the present time.
Therefore, there are a very large number of complex problems which the House and the Government will have to consider in regard to future rating and valuation. It is right that, from this basis, hon. Members should consider—not in a dogmatic frame of mind, because these questions are too technical and complex for that—what system will best serve the public interest in achieving uniformity, and thereby make an equitable operation of the grant system possible.

4.42 p.m.

Mr. Aneurin Bevan: The subject that we are discussing is, of course, one of the most complex in the whole of local government, and I myself have never been satisfied that the rateable value of property is necessarily the most equitable way of raising revenue for local government. There are quite good reasons for believing that the assumptions that historically underlay that system have long since been invalidated.
For example, it is always assumed that a person's place in life and his wealth would be revealed by the kind of dwelling he occupied, and that we could, on the basis of its sumptuousness or lack of sumptuousness, find out his income as well, so that local taxation derived by levies on property would, in the second remove, be actually levies on wealth. In these days, the very wealthy people live in very small houses. Actually, they do not make the contribution to local expenditure that they ought in equity to make, and therefore these assumptions are really not as valid as they once were.
Not only that, but it is an extremely difficult matter to value property equitably as between one resident and another, and I would myself favour an examination—it may be, by means of a Royal Commission—to find out whether indeed we ought not completely to revise the methods by which we obtain revenue for local expenditure.
There is also another and even more vital consideration, and that is that the central Government is now so heavy a subscriber to local expenditure that the position has been completely revolutionised. Indeed, in some counties in Great Britain as much as 80 or 86 per cent. of local expenditure is found by

the Exchequer. [Interruption.] My hon. Friend says that they are all in Wales, but he should look at the mountains of Scotland as well. The reason it is so in Wales is that Wales happens to be a mountainous country, but a lot of the counties also happen to be in Scotland.
This is where I think that hon. Members, especially those on this side of the House, should examine this matter very narrowly indeed, because it may be—I do not want to attribute any sinister designs—that very grave damage can be done to the poor people of this country if this legislation is not watched very carefully.
Indeed, the hon. Member for Hertford (Mr. Walker-Smith) gave the game away just now. In 1948, he and his friends fought strongly against this method of doing it at all. They wanted, as the hon. Member said, postponement of the equalisation grant until we had uniformity of rating. Let us suppose we had done that. We would now be in the position, in 1952, that the poorest parts of Great Britain would be unable to carry out their local government functions.
One of the reasons we found it necessary to go on with the equalisation grants was that, where the heavy industries are situated, the population could not provide themselves with local government services. Certainly, educational expenditure as we know now is crushing, and, if we had not had the equalisation grants in 1948, a very large proportion of the working class population of this country would not even have started to benefit from the operation of the 1944 Act.
It is nonsense for the hon. Member to say that we have put the cart before the horse, because he was thinking about a particular cart and a particular horse. What the hon. Member was thinking about was how to perpetuate the highly favoured situation that some parts of Great Britain, where the wealthier people live, have been enjoying for generations. The Bournemouths, the Cheltenhams, and places like that, with a very high rateable value per head of the population, could, in fact, afford a wide range of local government services, while the Merthyr Tydfils, the Durhams, the Lanarkshires, the Glamorganshires and the Monmouths were starved of local government services. What the hon. Gentleman and his friends were really wanting to do was to maintain the position of privilege which those wealthier places had enjoyed for so long,


and that is why we have to watch this legislation to see what is being intended.
It has been suggested that one of the reasons this Bill is necessary is the shortage of staff. We cannot understand why staff have been dismissed. The Minister can ride one of two horses he cannot ride both. Either the legislation is too difficult to operate; in other words, it needs to be revised, in which case proposals for revising it ought to be brought before us; or it is not operating as it should do, because the Minister has not got the staff.
Why is it? I admit that it may be that the estimators, who have been doing the work for the valuers, have been dismissed because the valuers have not caught up with them, but we cannot understand why estimators were dismissed some months ago. Now the right hon. Gentleman says that he has not got enough bodies. I have received letters from different parts of the country from estimators who have been dismissed. While it may be that there is a perfectly proper explanation for this, we would like to know what it is.
It may be that the estimators are too far ahead with their work because there are not enough experts to work on the material that the estimators provide. That may be, but there is a little confusion about it at the moment. Also, it may be—I was a little doubtful about it at the time—that they have been handed over to the Inland Revenue, because they are a heavy-footed lot there.

Mr. Houghton: I am sure that my right hon. Friend will wish to withdraw that.

Mr. Bevan: My hon. Friend the Member for Leeds, West (Mr. Pannell) has a form so complicated, drawn up by the Inland Revenue for valuation, that no one can understand it at all. When I say "heavy-footed" I mean that if there is a simple task to perform, they are the gentlemen to make it as complicated as possible. In fact, they suffer from too much expertise. They evolve documents at the centre that can never be understood at the periphery. Therefore, it may be that the perfectly simple formula which the Ministry of Health devised in 1948, when it has been passed over for interpretation to the Inland Revenue, has undergone so many mutations and evolutions

that now it is no longer the child it was.
That is the reason I suggest to the right hon. Gentleman that he might find—I am not certain that he can, because this will depend on what his legal advisers say—that there is in the Act itself sufficient scope under which the valuations can still be done without violating the law and for getting the job over as quickly as possible.
I hope that we are not going to go back to the gentleman called the "hypothetical tenant," because I warn my hon. Friends that under that formula can be disguised means by which the heaviest rate burden can be transferred to the poorest cottagers. How is one going to find him? He could not be found before. Indeed, I explained in 1948 that when the rating authorities asked for the advice of the Central Valuation Committee about the hypothetical rent, they answered, "You must in fact base it on what the hypothetical tenant would pay for the house, but if that results in an unreasonably low or unreasonably high rent, you may disregard it" So where do we get to there?
That is a purely subjective figure, for how is one to decide what is an unreasonably high or an unreasonably low rent? There is no objectivity about that. It depends entirely on one's prejudices. One usually believes that one's valuation is unreasonably high and the other man's unreasonably low; but I know of no tribunal which in fact has ever been able to interpret these classifications with any satisfaction, and I have sat on many assessment committees.
So in these days, when we have various local categories of cottagers, some on standard rent, some on controlled rent and some who have escaped from control altogether, and especially when there is a great shortage of accommodation, it seems to me that to listen to the experts and to say that once more we must go back to the hypothetical tenant is merely to hand over local property valuation to, star-gazing.
I know that there is a very large body of people in this country who would like to get us back there, because it provides them with excellent employment; and, of course, it is a lawyers' happy hunting ground. Once we go back to a situation so unpredictable and so lacking in objectivity, poor people are apt to go to the


lawyers and say, Will you plead my case before the assessment committee?"
So the whole purpose of the 1948 Act was not only to devise a scheme by which we could have uniformity of valuation and by which the State could become a ratepayer to every local authority in Great Britain without any risk, but at the same time to adduce some principle of objectivity in the valuation of cottage property. We thought we had found that by taking the cost of building to the local authority in 1938, because that is ascertainable. It is there. And if one takes contemporary value one gets away from the hypothetical tenant and gets to a basis that would be more satisfactory.
But, of course, all legislation depends upon intelligent and sympathetic interpretation. It depends entirely upon the thing not being done in too heavy-footed a way, but being done as flexibly as possible. And it is apparent to me that in this matter the Inland Revenue—I am certain unconsciously—have been providing the right hon. Gentleman with an alibi. I hope that he will not take it. I hope that he will realise that there is nothing at all that will be more deeply resented in Great Britain than to reproduce the unequal conditions that existed before the war when some favoured parts of the country enjoyed services denied to, other less favoured parts. We must still to forward to uniformity of valuation, because that is the basis of equality and of the equalisation grants system.
So I hope that the right hon. Gentleman will hurry up, will make up his mind; and if he needs fresh legislation or fresh interpretation of statutory duties for the Inland Revenue, let us have it quickly, and let us get on with the job, because local authorities are getting very impatient indeed.

4.56 p.m.

Lieut.-Colonel Walter Elliot: The right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) certainly began by saying that this was one of the most complicated of subjects. In his subsequent remarks he seemed to indicate that it was really all perfectly clear and would be so simple if what he called the "heavy-footed" Inland Revenue had not interfered. I leave that quarrel between him and the

hon. Member for Sowerby (Mr. Houghton), who interrupted him in the course of his speech.
Surely the course of events shows that it is not as simple as the right hon. Gentleman believed, either when he introduced the 1948 Act or when he was explaining the matter just now to the House. He accuses my right hon. Friend the Minister of Housing and Local Government of not having proceeded expeditiously enough, but that accusation lies against his own friends—perhaps "friends" is the wrong word. It is his own colleagues who were administering our affairs who had these things to carry through long before my right hon. Friend came into power at all.
The delay took place under the Labour Government, not the Conservative Government. The delay took place during the term of office of the right hon. Gentleman and his colleagues. Only for a year has my right hon. Friend been sitting in his seat on the Front Bench on this side of the House. He has seen the chaos and muddle approaching which we prophesied, which was pointed out to the House not only by myself and by my hon. Friend the Member for Hertford (Mr. Walker-Smith), but by local authority organisations all over the country, by urban district councils and by officers who would have the matter to administer.
They were the people who said that this delay and confusion would arise. It was the right hon. Gentleman and his colleagues who said, as the right hon. Gentleman still appears to think, that it would be all perfectly simple if we only approached it in a less heavy-footed manner. The right hon. Gentleman went further, making rather unworthy reflections upon my hon. Friend the Member for Hertford and upon the reasons which led us to move the rejection of the Bill. But, after all, these things are on record.
We moved the rejection of the Bill for the very reasons which are now causing the House to consider the postponement, perhaps to the Greek kalends, of one of its essential features—but not on the ground that it was going to put money into the poor parts of the country.
We said that we declined
to give a Second Reading to a Bill which … provides no adequate means to


deal with the continued rise of rates due to the ever-increasing expenditure which local authorities are required to undertake; establishes no direct relation between local expenditure and Exchequer assistance, and by the inadequacy of the proposed equalisation grants deprives many authorities of this type of Exchequer assistance altogether;
Then we came to the specific points to which the House is addressing itself this afternoon:
presupposes uniformity of valuation which, owing to the unsuitable machinery provided cannot be achieved for at least four years; and, in its proposals for valuation of dwelling-houses, discriminates unfairly between ratepayers in similar economic circumstances."—[OFFICIAL REPORT, 18th November, 1947; Vol. 444, c. 1009.]
Every word of our criticism has been justified by speeches from the Opposition this afternoon.
The right hon. Gentleman, greatly daring, branched out from the field which he knows so well—the local government of England and Wales—and embarked upon the field of local government in Scotland. He claimed that Lanarkshire would not get sufficient grants. He should know that valuation in Scotland is done by local valuation, and it was not proposed to be altered under his own Bill. It is done in many cases by a local valuing officer.

Mr. Bevan: The right hon. and gallant Gentleman has taken a false point. That was not the point that I made. I said that if we had postponed equalisation grants until we had uniform valuation, Lanarkshire would not have got the increased revenues from central funds.

Lieut.-Colonel Elliot: I was going on to say that there is no part of the Act under the present system more bitterly resented in Scotland, and particularly in the needy areas of Scotland, than the way in which the equalisation grants have worked out. The right hon. Gentleman's own friends in Scotland will, I am sure, be willing enough to back that up—that in cities badly requiring great assistance to develop their services, such as the City of Glasgow which I have the honour to represent, he will find bitter resentment at the way the equalisation grants have worked out. His own friends, in print and in speech, have frequently called attention to the necessity for revising the scheme altogether. He cannot blame Lanarkshire—

Mr. A. Woodburn: The right hon. and gallant Gentleman will agree that when the Act was originally going through the House, one of the assurances given to the local authorities of Scotland was that this valuation was going to be carried through on a proper basis in England, and since Scotland is tied to England in regard to the equalisation grants it gets at the end of that valuation, Scotland was going to benefit considerably. If this valuation is not carried through, Scotland will pre-presumably suffer.

Lieut.-Colonel Elliot: The traps into which the right hon. Gentleman falls in attempting to defend his right hon. and hon. Friends are absolutely unpredictable. He suggests that the Measure passed through the House on a pledge which everybody knew could not be carried out—he assures the House, in fact, that it was obtained under false pretences. That is what Scotland is complaining about. Either the right hon. Gentleman did not know what was going to happen, in which case he was to blame, or he knew what was going to happen and did not reveal it to the House, in which case he is more to blame. Anyhow, the result is self-evident. The whole of Scotland is in an uproar about the equalisation grant and the scheme which he and the right hon. Member for Ebbw Vale commended to the House with such vehemence when it was going through the House in 1947 and 1948.
This matter will always be difficult. The right hon. Member for Ebbw Vale contended that if the hypothetical tenant system were submitted it would not work. He said that, in fact, what happened was that the central valuation authorities said, "If it appears unreasonably high you should reduce it, and if it appears unreasonably low you should raise it." In fact, that system worked, and this system which the right hon. Gentleman sought to introduce is not working. The test is: Does it work?

Mr. Pannell: Is the right hon. and gallant Gentleman suggesting that the system worked before the 1948 Act? I was a member of a county valuation committee that was spending all its time attempting to get uniformity between county districts.

Lieut.-Colonel Elliot: I do not say that it worked perfectly, but this system is not working at all. Surely half a loaf is better than no bread. A system which works with difficulty is better than a system which, by the confession of previous Governments, could not be worked. Technical men could not put it through, and, by the arguments addressed to the House by those who have gone into it with great care, it could not work and has not worked.
Now the Opposition come in a white sheet. The right hon. Member for Ebbw Vale stands in front of all the Members connected with local government; none of us will deny his long and intimate experience of this subject and the way in which he strove to put many matters right. He comes here and says. "Let us have a Royal Commission." Well, it may be that that is the solution, and that the difficulties of working these systems are so great that this procedure will have to be embarked upon. But that is a suggestion which would certainly require consideration on both sides of the House.

Mr. Bevan: I am sure the right hon. and gallant Gentleman would not like to misrepresent me. What I said was that this matter of the rating and valuation of cottage property can be proceeded with in accordance with the formula of the 1948 Act, but that it was nevertheless, in my judgment, a matter for consideration as to whether that fundamental basis of local government taxation ought now to be reconsidered.

Lieut.-Colonel Elliot: I am not intending to misrepresent the right hon. Gentleman, and I trust that on further consideration he will agree that I did not misrepresent him. He makes the hypothetical assumption that this can be carried through. But even so, he says that the difficulties arising out of the levying of rates on houses—he devoted a considerable proportion of his speech to it—were so great that it might be necessary to depart from that method and embark on a new method for the consideration of which a Royal Commission might be adequate. I do not think I am misrepresenting the right hon. Gentleman.

Mr. Bevan: The right hon. and gallant Gentleman is misrepresenting me. I

suggested a Royal Commission not because of the complications, but because the assumptions under which the valuation of local property should be the basis of local taxation had been invalidated in the passage of time.

Lieut.-Colonel Elliot: The assumptions have become so complicated—

Mr. Bevan: No.

Lieut.-Colonel Elliot: Indeed yes—that it is no longer possible to base a system of taxation reasonably upon them. That was the right hon. Gentleman's contention.

Mr. Bevan: No.

Lieut.-Colonel Elliot: I do not wish to take the matter too far, but I think he will find that that is the implication of the words which he used. Certainly, from my point of view, I consider—I hope I may have the right hon. Gentleman's attention, because I do not wish to misrepresent him—that many of the problems of local government are becoming so complicated that an authoritative examination by some body capable of taking a non-party and objective view may be necessary. I say that the problems arising out of the weight of rates upon housing and the burden which they are producing upon new housing is so great that I should certainly value an expert examination of it. A Royal Commission might well be the best means of bringing that expert examination about.
Only on Second Reading is it in order to discuss everything that is in the Bill and everything that ought to go in the Bill. During the later stages it will not be possible to embark on this wider field. But I think it is fair to embark on it on an occasion such as this; for here we see the very bones of government—essential parts of the administration which govern the day-to-day fate of the citizens of our country. Also the housing problem, because that problem is governed by the difficulties which local taxation is imposing every day on those responsible for building houses for their fellow citizens or desiring to erect houses for themselves.
I do not wish to delay the House or to repeat the long and intricate discussions upon these matters which we had during the Second Reading, the Committee stage


and the Third Reading of the Local Government Bill of 1948. I only say that the difficulties which we anticipated then have now arisen, that the method which was selected has proved impracticable within the time that the Minister has suggested, that that has dragged grave consequences in its train, particularly between one part of the country and another. It has dragged even graver consequences in its train because of the working of the percentage grant, which has produced many of the dangers we foresaw when the block grant was departed from.

Mr. Bevan: The right hon. and gallant Gentleman means the rate equalisation grant.

Lieut.-Colonel Elliot: I accept the right hon. Gentleman's correction. The working of the rate equalisation grant has produced this evil, which we all know. When one asks a local authority to make some desirable economy or even increase a charge for a certain service in order to make it economically viable, they say, "What is the use? If we make a saving it means that our equalisation grant is reduced." It is a direct incentive to wastefulness and extravagance on the part of local authorities which has been injected into the very centre of the system by grants of this kind.

Mr. Pannell: indicated dissent.

Lieut.-Colonel Elliot: It is no use the hon. Member shaking his head.

Mr. Pannell: Speaking from experience as a member of a local authority—and surely they are the only people who can have an authoritative view about this matter—I can only say that I deny it.

Lieut.-Colonel Elliot: I am not speaking as a member of a local authority—I am a member of a central authority—but I am speaking of the experiences of members of Scottish local authorities who have put this matter to me time and again. It would not be natural if they did not adopt the attitude I have mentioned. It is an argument which leaps to the eye, and if the hon. Member thinks it over for himself he will see that it is inescapable from the operation of a percentage grant. That is the reason why the block grant was originally introduced.

I shall not go into that in more detail, because it might lead to a wider argument, though that will have to be considered in detail in the House some day, and at no great distance or space of time. When it is considered, it will bring into question the very foundation of our local government and the taxation upon which that local government depends.
I have here a mass of papers with which I shall not trouble the House. The debates which we carried on during the Second and Third Reading raised many interesting questions which, I can clearly see, it would be quite wrong to embark upon now. There are also many most interesting comments and arguments covering this system in the technical journals of the local authorities and other bodies and which would repay a great deal of attention. I do not think that we should go into them now, but the space of time which the Minister is obtaining by means of this Bill will not be too long for these matters to be considered. I hope that it will be possible to consider them with greater attention to the technical aspects of the case than was given last time the House considered this matter.
Long ago General Foch enunciated an admirable strategical maxim which is just as applicable in matters of administration as in matters of war. He said:
What is technically impossible cannot be strategically desirable.
Equally, what is impossible to carry out in administration is not suitable to place upon the Statute Book. That is the accusation I bring against the Government of the day which placed this statute upon the Statute Book, and that is the reason why I agree with my right hon. Friend in the steps they are taking to postpone the application of these valuation lists and to give the whole matter much fuller consideration than it has had hitherto.

5.16 p.m.

Mr. Douglas Houghton: With the permission of the House I will go back to the Bill, the last line of which says that nothing in it extends to Scotland or Northern Ireland. That is not to deny a Scottish interest in the Bill because, as the right hon. and gallant Gentleman pointed out, the longer the delay in clearing up the present chaos in rating valuation in England and Wales


the longer we shall take in straightening out the present anomalies of the rate equalisation arrangement.
The right hon. and gallant Gentleman said that at the time of the 1948 Act Scotland did not want to adopt the basis of valuation set out in that Act because Scotland have local valuation officers—the very thing, presumably, he thought we ought to have in England—but he omitted to mention that the bulk of the lands valuation officers in Scotland are quite independent of local authorities and are, in fact, Inland Revenue officials.

Lieut.-Colonel Elliot: The hon. Member knows that in the great cities the city assessor is an officer of the city and is paid by the city.

Mr. Houghton: I said "in many cases." In most of the country areas the lands valuation officers happen to be local inspectors of taxes specially appointed to that job and given additional pay for it.
I want to return to the opening speech of the right hon. Gentleman the Minister of Housing and Local Government. He sketched the circumstances leading up to the introduction of this Bill. I was very glad to hear him say that no fault or default of the valuation officers was responsible for its introduction. I was especially glad to hear him say that because there are probably some things about these valuation officers, in common with the rest of the public servants, of which the "hatchet group" on the benches opposite are not aware. The "hatchet group" are the men of the axe on the benches opposite, who are just about to set out on their annual pilgrimage to the tomb of the late Sir Eric Geddes. They are notably absent on occasions when we are discussing matters of great importance in connection with public administration and public expenditure.
Behind this Bill lies a great deal of wasted effort—work done which will have to be scrapped—and the "hatchet group" ought to be here asking why. In common with the rest of the Civil Service, the valuation officers are working six and a half hours a week longer than the standard hours of the Civil Service before the war, and three and a half hours are being put in for no extra pay, even among the lowest grades of all. That should be borne in mind, and at an early date I propose to ask the Minister's right hon.

Friend the Chancellor of the Exchequer how many more civil servants would be needed if the Civil Service demanded—as the rest of the trade union movement demand—a return to pre-war hours of work.

Sir William Darling: I am not a member of the "hatchet group"; but there is another alternative. If taxation is reduced, the Civil Service will not have to work so late or collect so much money.

Mr. Houghton: There will still be a great deal of work for the public service to do, however low taxation may go. That intervention was quite irrelevant to what I was saying about the level of hours worked by the Civil Service. I mention the subject only incidentally and for the benefit of those who do not attend our debates when these matters affecting public administration are under discussion.
The Minister asked, "What has happened to compel us, unfortunately, to introduce this Bill extending the date by which the new valuation lists should come into operation?" I can only express a personal opinion. I do not think the Board of Inland Revenue ever set out with enthusiasm and determination to do this job. Why do I say that? Because I do not believe they offered sufficiently attractive terms to professional and quasi-professional men to go into the Inland Revenue on a temporary basis in order to carry out this very large and important task.
In 1948 and since, professional and technical men have had many attractive opportunities open to them for work in private practice in their own professional field. The Minister referred to some of them—where practitioners of various kinds are in great demand to deal with war damage claims, with compulsory acquisition claims and with many other matters connected with their professional duties; and the kind of salary which was offered to these professional men—from £500 to £900, from £750 to £1,250—was not enough to attract men of the quality and experience necessary to carry out this job.
When my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) was Minister, he was confronted with a dilemma. The work was lagging behind;


progress was slow both in the assessment of business premises and the assessment of dwelling-houses. While this pioneer work was being done in connection with the new valuation lists, these same officers had to cope with current valuations of new properties for current rating purposes, and in some localities, as we knew, house building was proceeding apace, whether by local authority or by private builder, and a considerable amount of current work impeded the discharge of this capital work in connection with the new re-valuation. My right hon. Friend the Minister then permitted the Department to press on with the re-assessment of business and industrial premises and to suspend for the time being valuations of dwelling-houses.
I come to the crucial point in this matter. If I may say so with great respect, the Minister did not deal frankly with the House about the present position in the valuation offices of the Inland Revenue—and perhaps this is the moment at which I ought to declare that in my trade union capacity I am the secretary of an organisation which represents thousands of people at work in the valuation offices of the Inland Revenue. In response to a question by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), the Minister said he would see whether a change in the basis of valuation could be made within the framework of the combined site value and cost basis for post-1918 houses; and I am bound to say that when he said that, unconsciously though it may have been, the Minister was misleading my right hon. Friend.

Mr. H. Macmillan: I do not see why the hon. Gentleman should say that. The right hon. Member for Ebbw Vale (Mr. Bevan) was the author of this Act and he made a statement that the purposes which I had in mind could, in his view, be carried out within the terms of the Act. It would have been grossly discourteous of me merely to have denied that without even looking at it. If the right hon. Gentleman were right, it would save me a great deal of trouble, because there would be no need of an amending Bill. It would have been very wrong of me to have waved it aside, without getting advice on what was to me an absolutely new point, which the right hon. Gentleman made with complete certainty and great precision.

Mr. Houghton: With great respect, the Minister is not free to consider continuing the combined site value and cost of construction basis for the post-1918 houses. Why is he not free? Because he has discharged the staff without whom he cannot carry the work forward. For the purpose of this part of the valuation work, the Inland Revenue had to recruit two separate and distinct kinds of professional staff.
One were the rating officers, who were used to this matter of rating on the hypothetical tenant basis and who had qualifications as rating officers while they were serving in local government. The other type of professional staff were the estimators, most of whom have now been discharged. These estimators were a kind of quantity surveyor, those who could estimate the cost of construction of a building at 1938 prices. The rating officers may value the site, but the estimators are the people who must value the cost of construction—and for the most part, the estimators have gone.
Why have they gone? They have gone because the Minister has abandoned that basis of valuation. My right hon. Friend said it was possible that they had got ahead with their work but that the valuers had not yet caught up, and that the estimators could go, having completed their task and left behind their estimates for the rating officers to link up with their site valuation, and thus calculate a rateable value on 5 per cent. of the two capital values; but when he suggested that as a possible explanation, I knew it was not so.
They have not left anything behind except their regrets at leaving the Department. In fact, the Minister must know that work on the valuation of dwelling-houses has been in complete suspense for a year, that no estimator has estimated anything for 12 months, and that estimators have been turned on to work other than that for which they were recruited in order to complete assessments on business premises, upon which the whole efforts of the Department have been concentrated in the last 12 months.
The Minister has discovered nothing new in the last 12 months about the difficulties of the basis of valuation on the site value and cost of construction, because they have not done any such work. Whatever troubles and difficulties


there are about this basis of valuation, linked with the hypothetical tenant basis of valuation for the pre-1918 dwelling-houses, and whatever anomalies were discovered about it, were discovered more than 12 months ago.
Nothing has been done in recent months which can account for any suggestion by the Minister that he is considering and will consider a change in the basis of valuation within the framework of the 1948 Act. I assert, without any fear of contradiction whatever from the Front Bench opposite, that the Minister has finally and irrevocably abandoned the cost value basis of assessment under the 1948 Act. So we may as well make up our minds to that.
The Minister, in fact, knew that when he gave his reply on 1st August. My right hon. Friend the Member for Bishop Auckland (Mr. Dalton), when referring earlier to this Question, was charitable enough to suggest that it was referring to the Bill now before the House. In my judgment, it did not refer to the Bill before the House at all. If it did, why was it necessary for the Minister to say in the same reply to the same Question:
It is intended that the basis should still be pre-war value."—[OFFICIAL REPORT. 1st August, 1952; Vol. 504, c. 209.]
Why that assurance about taking the basis of assessment on the pre-war value if the matter did not refer to the basis of valuation but only to the postponement of the date of delivery of the valuation lists?
Now, this is the problem. The Minister is asking the House to agree to deferment of the delivery of the valuation lists. He has put a date to it. In fact, today he has said he hoped it would be completed by 1955 or, at the latest, by 1956. But from the reply he gave to my right hon. Friend the Member for Ebbw Vale it is clear that he does not yet know what the basis of valuation is going to be. I cannot believe that the Minister will put a date for the completion of this task when he does not know what basis of valuation he proposes to adopt, and if he has something in his mind about that, why, then, did he say to my right hon. Friend the Member for Ebbw Vale that he would consider some alternative? No, events have gone too far in this matter for the Minister to go back.
I am not complaining about the proposals in the Bill to postpone the date. That, unhappily, is necessary, There is no chance of delivering the valuation lists by the date specified in the Act, even extended by the power given to the Minister. So we must agree to the postponement of the date of delivery, but I think the Minister was less than fair to the House in not filling in the important gap in our information, by disclosing to the House what he is doing about substituting a different basis of valuation for the one specified in the 1948 Act—if only because of this, that the valuation department of the Inland Revenue is now engaged on a task for which there is no statutory authority.
It is engaged on what the Minister calls preliminary work to enable the Government to formulate the proposals. Will he assure the House, or will the Parliamentary Secretary assure the House, that this is preliminary work to enable the Government to make proposals? Or is it actually the beginning of the job itself, for which the Minister will later come to the House for statutory authority? That, I think, we are entitled to know.
I should like the House also to understand that whatever the troubles and difficulties of the district valuers of the Inland Revenue—and they have many preoccupations—they always have been and they still are quite outside this process of re-valuation for rating purposes. Rating offices are physically distinct from district valuers In fact, in many towns there are rating offices where there are not district valuers. The rating office is a separate unit entirely, recruiting staff, particularly men who come from local authorities; but, of course, recruiting also a large number of temporary staff of one kind or another; so that rating officers have been free of any of the distractions that might otherwise have impeded their work had they been linked with the district valuers' office. So I think that there again, perhaps, the Minister did not leave the House with a very clear view of the true position of the rating officers and the difficulties they have had in discharging their task.
I come to this conclusion that there are two reasons—and, in my judgment, two reasons only—why the valuation department of the Inland Revenue has failed to complete this task. The first is that the


Inland Revenue failed to make a determined enough effort to recruit the staff it needed and to offer the terms of employment necessary to induce the qualified staff to come to the Inland Revenue for the job. Linked with that is the obvious difficulty of recruiting—in conditions of full employment, especially among people highly qualified—for purely temporary work, with an uncertain period of employment before them and the risk of being out of a job when they have finished. Unhappily, this postponement of the date of delivery of the valuation lists will prolong the length of the temporary work and prolong the uncertainty, and that is a bad thing.
I believe that had the matter been tackled intelligently and courageously, realising this important task had to be completed within a reasonable time, the job could have been done. I accept fully what the right hon. and gallant Gentleman the Member for Kelvingrove (Lieut.-Colonel Elliot) said just now, when he said that anything that proved administratively impossible is a bad basis for this House to endorse. This has proved administratively impossible up to now because, in my judgment, the necessary measures were not taken administratively to ensure its success.
The second reason which, I think, has contributed to this unhappy position is that the Inland Revenue has not made the best use of the staff it has had. Here, I know, I tread on delicate ground, but in this field of valuation and assessments and costings and what not there are strong professional traditions running throughout the whole field of complicated technique, and the barriers are rigid and traditional; and probably more frequently in this field than in any other there is a tendency by the professional men to want to hold to what they regard as professional practice.
The problem of devolution was never, apparently, tackled on this job. Had not devolution been practised on a large scale for many years on the Income Tax side, it would never have been possible for this work to have been done. We have been confronted here with professional rigidity, which, I am certain, could have been relaxed to the advantage of the completion of this job.
I regret as much as anyone the delay that has occurred and the reasons for this Bill, because one cannot escape the uncomfortable feeling that, somehow or another, this is a reflection upon a large body of loyal and enthusiastic staff whom I have the honour, in my trade union capacity, to represent. I regret it all the more deply because of that possible implication, but I think that the Minister might have been more frank with the House in explaining where we go from here.

5.39 p.m.

Mr. Henry Brooke: It seems as if we all agree that this Bill must be put on the Statute Book, even though we have different reasons. The hon. Member for Sowerby (Mr. Houghton) has been telling us that the trouble started because inadequate terms and conditions of service were offered to expert valuers by the Government of which he was a supporter. The right hon. Member for Ebbw Vale (Mr. Bevan) called for a Royal Commission on local government finance—something which I myself have wanted for at least five years, and I know that my hon. and learned Friend the Member for Ilford, North (Sir G. Hutchinson) has been constantly voicing that request in this House and elsewhere.
A number of our difficulties might have been solved if the right hon. Gentleman the Member for Ebbw Vale had come to that conclusion during the six years that he was the Minister in charge of local government, because by now we should have had the Commission's report and might have been better placed to see our way ahead.
At one time this afternoon I felt that the House was going to become quite heated about this extraordinarily austere and chilling subject of valuation for rating, but that was when the Privy Councillors were getting at one another. Now I think we are back at the usual level—the somewhat cold level to which we are accustomed whenever this House is discussing a local government Bill. I quite agree that the Bill cannot be considered except against the background of the equalisation grant scheme, and I feel a very strong temptation to express my views on that, but this is not the time for it.
What we have to do somehow, it seems to me, is to help the Government in bringing into existence a system of valuation which will not only be fair but will be seen to be and will be accepted as being fair between one ratepayer and another. At the moment we are a long, long way from that desirable goal. Besides, from what my right hon. Friend told us at the beginning of this debate, and, indeed, from what has become an open secret to anyone at all connected with local government circles, it is now absolutely definite that the new valuations, good or bad, cannot come into force at what is at present the statutory date. Therefore, we are all agreed that some postponement has become necessary.
Can we agree a little further than that? If no way has yet been found—and I listened to the right hon. Member for Ebbw Vale when he suggested that the possibilities of the 1948 Act had not yet been explored to the uttermost—to operate the provisions of the 1948 Act in such a way as to avoid its producing a result which will be definitely unfair as between one house occupier and another, then it is a waste of time and money to ask professional people to continue to work in that direction indefinitely without any fresh guidance. We all know that the coming into force of a new valuation list is always unpopular anyhow. If the effects are glaringly unfair and inequitable as between one class of people and another, then that is not merely a matter of transient unpopularity, but is sheer disaster.
I thoroughly agree that the whole system of rating, in its setting of local government taxation and finance, needs a larger investigation than anything which has yet been adumbrated. But this Bill raises a lesser issue, and I entirely support the Minister when he says that this postponement, which is necessary on other grounds, can and should provide the opportunity for seeing whether, by any means within the compass of the 1948 Act, or with the benefit of fresh legislation, a new valuation can be evolved which will be fair and be seen to be fair.
I think I am the first hon. Member taking part in this debate who represents a London constituency. In London we have had a quinquennial valuation,

every five years, from 1870 to 1935. The present valuation lists came into operation in 1936. They are now 16 years old, and it looks as though they will be 20 years old before they are replaced. Any of us who have any local government experience know the immense complications that that long period of time is bound to produce, and the extraordinary difficulty, whenever new hereditaments have to be valued, or alterations have to be made in the assessment of existing property, in fitting together all the new pieces so that there are not gross anomalies as between one and another.
Indeed, in London we started with the anomalies, because, as the House no doubt knows, London is the one part of the country which has never had any effective machinery for the levelling of valuations as between one rating authority and another. In London it is no secret that, whereas some boroughs, while they were still rating authorities, were meticulous and conscientious in trying to fix assessments in strict accord with the law, there were other boroughs which managed to strain the law a good deal in the direction of low assessment, and thus have not made their full and equitable contribution to the county rate.
My own borough of Hampstead is one which always, so long as it was a rating authority, sought to administer the law—I was almost going to say in its full rigour. If I were to describe the constituency I represent as an over-rated one, that might be misunderstood. Perhaps I shall not be falling foul of anybody if I say that there are some other parts of London which are under-rated. That is yet another of the complications and unfairnesses which we have in the London area, and all those anomalies are going to be perpetuated for a further period by any more prolongation of the present valuation lists.
All I, therefore, want to say in conclusion is this. Thorny and difficult as this subject is, I trust that in no part of the House when we have passed this Bill shall we simply say, "Thank goodness for that. Valuation is a horrid business. Let us put off the coming into operation of the new system as long as possible." That would be a disastrous attitude to take up, and it would be extraordinarily unfair to certain classes of ratepayer.
I listened to my right hon. Friend carefully, and I am not quite sure whether, in his speech introducing the Bill he did actually repeat the date 1956 which he mentioned in answer to a Question earlier in the year. I do not want to hold him to a particular date, but I should like an assurance from the Parliamentary Secretary, when we give him this Bill, that his Department recognises the intense importance of speeding on as fast as possible in order to achieve at a reasonably early date new valuation lists which will be fair to everyone.

5.50 p.m.

Mr. Thomas Fraser: There has been an assumption made by several hon. Members that the Exchequer equalisation grants cannot be considered during the Second Reading of this Bill because the review of the Exchequer equalisation grants can only take place when the valuation lists are prepared and submitted on the later date which is now proposed in this Bill. I am going to appeal to the Government not to delay the revision of the Exchequer equalisation grants until this later date set out in the Bill.
We who represent Scottish constituencies know that the Secretary of State for Scotland has appointed a working party of municipal treasurers and representatives and of officials of his own Department to review the working of this arrangement in Scotland. The Minister of Local Government and Housing said in a letter to my hon. Friend the Member for Glasgow, Central (Mr. McInnes), on 13th August this year, that a parallel investigation is about to begin in England and Wales. I think that these two Ministries have undertaken to have this review into the working of this arrangement because they know that the existing scheme is not working satisfactorily. If they find a solution of the difficulties this year, within a few months, as I think is quite possible, it would seem to me to be most unfair to the authorities that are being unfairly treated to ask them to continue to be treated inequitably and unfairly for another period of years.
The right hon. Member for Ebbw Vale (Mr. Bevan) talked about the reason for the scheme being introduced in 1948. He said that it helped very considerably the poorer authorities and that is what it was expected to do. It undoubtedly did that.

It gave rough justice. My complaint is that the scheme, although it has given rough justice, has none the less failed to provide assistance for some of the harder hit local authorities in the country.
The right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) made reference to Lanarkshire, and I think that he was making the assumption that Lanarkshire was one of the county authorities that had reason to complain about the operation of the existing scheme. My constituency is in Lanarkshire. I am not sure that Lanarkshire is one of the Scottish local authorities that has been unjustly treated under the scheme. I know, of course, that there are many other county authorities in Scotland and in England and Wales that have been much more generously treated than Lanarkshire.
I also know that cities like Glasgow and Dundee have not come out of this arrangement well. I think that they have not come out of this arrangement well because, in drawing up the formula in 1947–48, we gave too much weight to the rateable value of the local authorities. I sincerely believe that to be so, and I give it to the House straight away that I had some responsibility for the formula that was then decided. I was a junior Member of the Government at that time, and it was my responsibility, along with others, to speak in support of the provisions of the 1948 Bill.
The right hon. and gallant Gentleman the Member for Kelvingrove had a very lively recollection of what he said, and what was said by others, during the discussion of the English Bill in 1948, but I thought that he had not such a lively recollection of the discussions on the Scottish Bill, or that he decided not to repeat this afternoon the sense of the observations which he then made. In 1948, the right hon. and gallant Gentleman thought that to take the mean rateable value of England and Wales and to increase that by 25 per cent. and to assume that it was fair to the Scottish authorities was wrong. He said in 1948 that what we ought to do was to provide in the statute that there would be 50 per cent. added to the mean rateable value in England and Wales, and that would near enough represent the mean rateable value of Scotland, and be treating Scotland on an equal basis to England and Wales. We resisted this suggested Amendment at that time.
Scotland has about one-eighth of the population of England and Wales. I found, in 1948, that the rateable value per head in Scotland was £8.6 and the rateable value in England in the same year was £7.4, which suggests to me that the 25 per cent. addition that we made to the English figure in 1948 was about right, and is still about right. In the recent figures which I have for 1951–52. I find that the rateable value per head of the population in Scotland is £9.3 and in England, £7.8. I think that if we again add 25 per cent. we get just about the Scottish figure.
Although the right hon. and gallant Member for Kelvingrove is quite right in saying that local authorities throughout Scotland are complaining about this arrangement because they think that Scotland has been treated ungenerously under the scheme, I think it only fair to say that with one-eighth of the population of England, the Scottish local authorities get exactly one-eighth of the amount of the grants that are paid to local authorities throughout England, excluding Wales.
Scottish local authorities last year received £5,800,000 in round figures. The English local authorities received £46,200,000, which is nearly eight times the Scottish figure. But the burden of my complaint is that although Scotland as a country seems not to be treated ungenerously under the scheme, there are great authorities in Scotland that are treated unfairly under the scheme because, I think, the rateable value is based on the calculation of need. I find that if we compare Glasgow with Birmingham we get a result like this: The rateable value of Glasgow is £12,499,000 and Birmingham, with a little bigger population than Glasgow, has a rateable value of £7,445,000. There is something wrong there.

Lieut.-Colonel Elliot: Does not that look more like my figure of 50 per cent. than the figure which the hon. Gentleman has been quoting?

Mr. Fraser: If the hon. and gallant Gentleman will really apply his mind to this matter and to the argument, he would appreciate that what I am saying, and what I have shown by the figures I have already mentioned, is that the Scottish figure is about 25 per cent. above the English figure, but I went on to say that

there are great authorities in Scotland that have been very badly treated under this arrangement.
I have mentioned one and compared it with an English authority because it happens to have roughly the same population. I find that the rateable value per head of the population last year in Glasgow was £11.4 and in Birmingham £6.7. The consequence of all this is that Birmingham is generously treated under the scheme and Glasgow gets nothing at all. Last year, Birmingham got £1,315,000: Glasgow got nothing at all.
I find also that Glasgow has a rate burden per head of the population of £9 15s. a year which, I think, is the highest figure in Great Britain. The ratepayers of Glasgow are paying more in rates than the ratepayers in any other part of the country, despite the fact that Glasgow has such dreadful housing conditions—tens of thousands of people living in vermin infested tenements—but, even so, the amount of rate paid per head of the population in Glasgow is, I think, by far the highest in Great Britain. It is certainly higher than any other figure I have been able to get from the Secretary of State for Scotland or the Ministry of Housing and Local Government.

Sir G. Hutchinson: Perhaps the hon. Gentleman will accept it from me that the figure in the Metropolitan boroughs is higher than that in Glasgow. It is £17 2s. 11d.

Mr. Fraser: If the hon. and learned Gentleman says so, I accept it, but I have asked the Secretary of State for Scotland and the Ministry of Housing and Local Government to give me figures for many cities and counties and I have not yet had one with a rate burden anywhere near that of the citizens of Glasgow.
To return to my comparison between Glasgow and Birmingham, the amount of rates collected per head of the population in Glasgow was £9 15s. and the comparable figure for Birmingham was £6 14s., a difference of £3 1s. per head of the population. Yet Birmingham has a contribution under the Exchequer equalisation grant scheme of £1,300,000, while Glasgow gets nothing at all.
It is clear beyond argument that the method we adopted of measuring the need of the local authority was wrong, and I appeal to the Government to introduce a


scheme for the redistribution of the money among local authorities pending the preparation and submission of the new valuation lists proposed in the Bill. The Government should do that in fairness to local authorities. I do not want to compare Dundee with cities in the south, Lanarkshire with Monmouthshire, and Scotland with Wales, except to say that Scotland gets a grant of about £6 million a year and Wales about £9 million, although Wales has only half the population of Scotland. I urge the Government to call for an early report from the working parties on an amendment of the scheme we adopted in 1948 and not to penalise some local authorities by making them wait until the new valuation lists are ready in several years time.

6.4 p.m.

Sir Geoffrey Hutchinson: The hon. Member for Hamilton (Mr. T. Fraser) speaks with a very special knowledge of local government matters in Scotland, and his speech provides an interesting commentary upon the claim that was made by the right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) earlier this afternoon. The right hon. Gentleman claimed that the effect of the formula which he introduced into the 1948 Act was to provide funds for local authorities who were too poor to pay for their services, and to do that at the expense of the local authorities whom he regarded as being unduly favourably circumstanced. The claim of the right hon. Gentleman was based upon his formula of accepting the average rateable value per head of weighted population as an indication of the ability to pay.
I grant that that may be some indication, but it is only a very broad general indication. If you take the basis to which the hon. Member for Hamilton referred, that of rates raised per head of population, we find that the right hon. Gentleman's formula gives a very different result from the result which he claimed. That is the reason why Glasgow and Dundee have come out so badly under the right hon. Gentleman's formula. Middlesex has come out badly, too. Middlesex has no equalisation grant. Yet there are people in Middlesex who are by no means well circumstanced to pay the high county precept which the

Middlesex County Council must in consequence impose.
The answer to the claim made by the right hon. Gentleman is that, if average rateable value per head of population is a true measure of capacity to pay, the rates in London, Birmingham, Manchester and Glasgow ought to be the lowest rates to be found anywhere in the country; but we all know that that is not the case. What is wrong with the formula is that it disregards the very high cost of administering a highly congested urban population. That is the reason the formula which the right hon. Gentleman introduced into his Bill in 1948 has produced such very unjust results in Glasgow and Dundee and perhaps other places in Scotland, and certainly in a very large number of places in England and also one or two places in Wales.
The hon. Member for Sowerby (Mr. Houghton) possesses many sources of information which are not available to me or to other hon. Members. He may be right for all I know when he says that if the Inland Revenue authorities had approached their new task with greater intelligence or courage, we might have had a valuation list ready to deposit today. But I thought he did less than justice to my right bon. Friend when he blamed him for these shortcomings. It was not this Government which had to undertake the task of initiating the new valuation.

Mr. Pannell: In fairness to my hon. Friend the Member for Sowerby (Mr. Houghton), who is not in his place at the moment, he did not blame the Government for failing to do that. He made it perfectly clear where he thought the responsibility lay at the beginning of the scheme. He merely indicted the Government Front Bench for lack of frankness this afternoon.

Sir G. Hutchinson: So be it. I am very glad that the hon. Gentleman did not blame this Government for any lack of courage or intelligence for the way in which they have approached this task.

Mr. Pannell: We do now.

Sir G. Hutchinson: So far this afternoon no one has challenged what the Minister proposes to do under the Bill. Indeed, the action which he seeks to take has been rendered virtually inevitable.


That is attributable, in my view, to the changes which were brought about by the Act of 1948 and partly by the manner in which the Inland Revenue Authorities have attempted to carry out the duties which were then placed upon them.
I am not in any way blaming the capable, reliable, most obliging and polite officials who work in the offices of the district valuers. I know what a difficult job they have, and no doubt the difficulties of valuing upon the new basis of what is called "hypothetical building costs" were very formidable. My criticism of the Inland Revenue authorities is that they appeared to have approached their task as though properties had never been valued before. So far as I have been able to make out, they have been going round the country re-surveying and re-measuring every hereditament.
A gentleman came to the house in London where I live. He was most courteous and polite, and he asked me whether I had any objection to his measuring and counting the rooms that were in the house. I said to him, "I have no objection to you doing that, but this house has been rated for over 200 years. The rooms are still very much the same size as they were when the house was first built. Surely the rating authority in the course of 200 years have collected information of that sort." He replied that he was very sorry but those were his instructions, and if I had no objection he would like to go ahead. He went ahead and spent a happy day measuring the rooms. I hope it was a profitable day, too, but I am not quite so sure of that. At any rate if this has been going on all over the country, it is not really surprising that the Inland Revenue authorities have not got to the end of their task.
The result is that today the Inland Revenue authorities have not, in fact, been able to produce any valuation list on the appointed day. I have always held that valuation is a local responsibility and ought never to have been taken away from the local authorities to whom, in my view, it properly belonged. Of this I am satisfied, that if the local authorities had been responsible they would have produced a valuation list which at any rate was capable of being put into operation, and which would have established a reasonable measure of uniformity.

Mr. Pannell: Why have the local authorities completely failed to produce valuation lists which were uniform in county districts within a county, let alone county by county?

Sir G. Hutchinson: I am coming to that in a moment. I agree with the hon. Gentleman that they never did succeed in establishing uniformity of valuation between counties and county boroughs.

Mr. Pannell: I said county districts within counties.

Sir G. Hutchinson: All right, county districts. They did, in fact, produce valuations on the appropriate day, and I would say that the county valuation committee system was succeeding in establishing between hereditaments in the same county or in the same rating district a reasonable measure of uniformity.
I was going on to say that it is particularly unfortunate that the new valuation lists should not be ready, because, as my hon. Friend the Member for Hertford (Mr. Walker-Smith) and others have pointed out, the distribution of Exchequer grants to local authorities is based upon the assumption that a greater measure of uniformity, not only between hereditaments within the same county, but between county boroughs and county councils would be established.
The Rating and Valuation Act, 1925, did establish a reasonable measure of uniformity between hereditaments in the same rating area and between rating areas in the same county. I think the county valuation committee was gradually producing the results which were expected from it. But the Act did not produce a measure of uniformity between county boroughs and county councils. It is that lack of uniformity, and not the lack of uniformity between individual hereditaments or different rating areas, which is bringing about the injustice to which the hon. Member for Hamilton was referring a few moments ago.
It is not surprising that the Act of 1925 never succeeded in producing that result. It was not intended to do so. At the time when that Act was passed, there was no very great importance in establishing uniformity of valuation between county councils and county boroughs. It was only when the Act of 1948 was passed and the basis of the distribution of the Exchequer grant became rateable value


that it became essential that a measure of uniformity between county boroughs and county councils should be established.
It would have been possible by a simple revision of the Act of 1925, as was suggested by the Central Valuation Committee before they disappeared in 1948, to have established a measure of uniformity between county boroughs and county councils which would have ensured the equitable operation of the Act of 1948.
I was very glad to hear my right hon. Friend say this afternoon that he intended to make use of the interval which will elapse before the new valuation list can be deposited to review certain aspects of valuation policy. I hope he is going to examine the whole situation of local rating. He might, I think, very well examine the question whether these quinquennial valuations have not under present-day circumstances, become impracticable; or whether they are now likely to serve any useful purpose.
Before 1925, for centuries, the local authorities carried out valuation without being required to undertake the immense disturbance involved in a quinquennial re-valuation of the whole of their areas. The system worked not too badly. What has happened in the 27 years that have elapsed since the 1925 Act was passed? It has only been possible to deposit the quinquennial valuation lists on two occasions. When each subsequent list was due to be deposited, for one reason or another, it has been found impracticable to deposit a valuation list. In the light of this experience, it might well appear that no useful purpose is served now by continuing the system of quinquennial revaluation.
I hope my right hon. Friend will also take the opportunity of considering whether we ought now to restore, as I have always held that we should, responsibility for valuation to the local authorities from whom, in my judgment, it should never have been taken away. Valuation is, and always was, a local responsibility. I hope that my right hon. Friend will not close his mind to the possibility of restoring to the local authorities this responsibility which should never have been taken away from them. If he decides to take that course, some modification of the system, as it

existed before 1948, would clearly be desirable. I do not take the view that local valuation is incapable of establishing the degree of uniformity of valuation which is essential for the fair working of the Act of 1948.
The Central Valuation Committee, which was established under the Act of 1925 and for many years did most useful and valuable work before they disappeared in 1948, made what seems now to have been a very wise recommendation to the Minister. This is what they said:
When the Government's original proposals for the reform of the machinery for rating valuations were sent to us, we made to you representations that, provided certain changes were made in the structure of the existing valuation machine, efficient valuation lists could be prepared by enlarged ad hoc valuation authorities, within the framework of local government, in a shorter time than would be possible by a newly created central valuation department. We have from time to time reiterated this view, and we have also represented to you our concern as to the expediency of attempting this major change of organisation.
We can all see now the consequences of neglecting that skilled and disinterested advice. I hope that my right hon. Friend will not consider that it is now too late to retrace our steps and to follow the very wise course which was recommended to the Minister of that day by the Central Valuation Committee before it passed out of existence.

6.24 p.m.

Mr. G. A. Pargiter: This is a small Bill with large consequences, larger perhaps than we know of. The Minister said he intended to use this postponement to review certain aspects of valuation. It would have helped the House very much in considering the Bill had the Minister been a little more forthcoming and given us some idea of what he has in mind. It must have been obvious to him for a long time that, whatever the difficulties were, we might have expected him to have made up his mind about what he intended to do.
I did not follow some of the arguments of the hon. and learned Member for Ilford, North (Sir G. Hutchinson). He referred to the old Act and said that uniformity between authorities did not matter so much, except within a given area. That is not correct. Highly-rated areas were badly treated under the old Act and under the block grant system,


and they will probably be badly treated in future. There should have been national uniformity, or something approaching it, for the old block grant formula to have operated equitably.

Sir G. Hutchinson: I said that, when the Act of 1925 was passed, uniformity between county boroughs and county councils was not of importance. The hon. Gentleman knows that the block grant came in 1929.

Mr. Pargiter: I appreciate that. I thought that the implication of the hon. and learned Gentleman's remarks was that that situation was continuing and that it was not necessarily a bad thing. I very strongly opposed the hypothetical tenant basis because it is well-known that in the highly-rated areas it never worked and was never likely to do so. From 1934, valuation in all the larger areas was begun on a much more scientific basis than on the basis of the rent which could be obtained between a willing landlord and a willing tenant. In the inter-war years there was not such a basis, because the willing landlord was missing by reason of the Rent Restrictions Acts and the willing tenant was missing because of lack of accommodation in Greater London.
We arrived at a basis which gave us some reason to believe in uniformity and which was much more scientific. It had some bearing on the superficial area of the property, which was valued according to the amenities of the district. It gave a considerable measure of justice as between one ratepayer and another within a given area. Any thought of going back to the hypothetical tenant method might as well be forgotten, because it never existed. In many of the larger areas we must have a different system.
It was accepted widely in 1948 that the new basis for equalisation grants would have to be uniformity in assessment throughout England and Wales. Those who were members of the committee at that time will remember that we were pressing the Government to shorten the period in which new valuation lists would be prepared. We were prepared to accept some degree of inequality for a period, but we wanted the period to be as short as possible. In the event, it has turned out to be almost as long as possible, and it is likely to go on still longer.
According to the Bill, the Minister can determine by Order when the new valuation lists come in, and if he changes his mind he may make another Order varying the date again. There will presumably be nothing to stop him doing that. Something should be done about this matter. I accepted the view that, having regard to the knowledge we had of the inequalities of valuation throughout the country, the best thing to do would be to take valuation away from the interested parties. That is, after all, what the local authorities were. As long as the grants were continuing on anything like a basis dependant upon the rateable value which they were able to fix, it would obviously be to their interest, as they were their own masters, to get the best possible advantage out of the equalisation grant.
We should bear in mind one other factor. The method by which the poverty factor was dealt with—poverty of the area and not necessarily poverty of its individuals—was by the use of weighting factors. It was never intended that the equalisation grant should work unequally, and these weighting factors were designed to deal with the problems of areas with large numbers of children and a sparcity of population, long lengths of roads, and so on. It certainly was not intended to refer to the areas mentioned by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), who mentioned certain areas which were receiving an advantage because of their low rateable value. Low rateable value has nothing to do with the ability of the individual to pay, as I shall show.
In the County of Middlesex I know a large number of people in working-class areas who are certainly no better off than those in working-class areas in other parts of the country, even in some areas of South Wales, such as the mining districts. So poverty is no longer the question, as it was in the inter-war years under the direction of right hon. and hon. Gentlemen opposite, when we had poverty-stricken areas where the payment of rates or the running of services was a problem.
For those reasons it is highly desirable that we should arrive at uniformity and equality of valuations. If, after we have attained uniformity, we find that the equalisation grant is working inequitably between one area and another or one citizen and another, it will be our duty


to alter the basis of grant in order to get a proper relationship with the population, and certainly not to weight it so that it does something which was not intended. It is not even a question as between larger and smaller properties.
I have some interesting figures here of pre-fabricated houses, because probably the best single factor of equality is the pre-fabricated house as far as size and amenity are concerned. I have taken figures prepared by Hertfordshire and will give the House two examples. Lichfield is one and St. Albans, both cathedral cities, is the other. In Lichfield a prefabricated bungalow has a rateable value of £8. The rates in the pound in 195051 were 17s., so the total rates payable on that bungalow were £6 16s. One in St. Albans has a rateable value of £15; so that the rates on exactly the same property there, at 21s. 6d. in the pound, are £16 2s. 6d.
Here is the important difference between the two: Lichfield is in Staffordshire. Staffordshire receives 44 per cent. of its income from the Exchequer equalisation grant and St. Albans in Hertfordshire receives nothing. This kind of thing must not be allowed to go on longer than can be helped. We must get equality as between one citizen and another.
Now let us look at it from the point of view of some of the alleged poor areas which are receiving considerable sums in Exchequer grant. I have here some excellent descriptions of properties which are in the market now at quite fair prices. One I have a note of is in Westmorland. It has an entrance hall, two cloakrooms, four attractive reception rooms, 11 principal and four secondary bedrooms, four bathrooms—this is a modern property—three separate w.c.'s, excellent outbuildings, including a garage for six cars. It sounds highly desirable. It is excellently built, a modern property, and is in a pleasant and secluded position east of Lake Windermere. At least I take it that Lord Woolton found it so because this was his war-time home. The rateable value is £90. It sounds a lot of money, but in the county of Middlesex from which I come, a pair of ordinary semi-detached houses would together have about that same rateable value, about £45 each. Where does equality come in here? This is not a question of poverty.
Now let us look at what effect this has on the equalisation grant. Let us assume that this house with 15 bedrooms is capable of accommodating 20 people. Dividing the £90 rateable value by 20 to see what it is per head, see what a low figure results. See how far below the average rateable value upon which the equalisation grant is fixed this comes. That is how some of the big properties operate.
I am told—I do not know if it is correct—that Arundel Castle has a rateable value of £200. Yet it is one of the greatest properties in this country with a large staff and in an area which attracts equalisation grant. These figures are fantastic when it comes to the real values of such properties and the number of people they will accommodate because, as long as the rateable value is low and the number of occupants is high, the rateable value per head is much lower and therefore attracts equalisation grant.
I heard my right hon. Friend the Member for Ebbw Vale referring to Wales, but even he, in support of Wales, can hardly justify this example. I have here particulars of a small semi-detached house in Ealing with a sale value of about £3,000, rateable value £42. It is an ordinary end-terrace house. On the other hand, if I go to North Wales I can get a nice private hotel, quite large, with a rateable value of £45 as against £42. Of course this comes into the business premises class, but one is a fairly large hotel with a dining room seating about 80 people and the other is quite a small house. And there is no part of Wales which does not receive a substantial equalisation grant.
It is easy to pick out individual cases, but I could go over the whole country and point out similar anomalies. It will be found that in the main those areas in receipt of high equalisation grant have, by the very nature of things, a low rateable value. Near Newbury, for instance, there is a house with an advertised selling price of £4,350, rateable value £9. A house in Penzance at £3,500 has a rateable value of £10, and one in Devon at £3,000 has a rateable value of £7. In Norfolk a house at £3,000 also has a rateable value of £7.
There certainly seems to be a good deal of uniformity between these selling prices


and low rateable values in some counties. They ought to bear some relationship to rateable values in other parts of the country where property has been fairly valued. However, I will not weary the House with other examples, of which I have a large number, if any hon. Member or the Ministry is interested to see them.
One other aspect is in regard to the question of valuation panels. These panels—there are not many of them—were set up to deal not only with the new valuation lists, but also present assessments; that was the job on which they were expected to begin. They have received instructions from the Minister that they must reduce their staffs. In other words, there will not be the staffs to be given the job for some time. In many cases, officers who have been serving in this kind of work for a long time will have to be dismissed. The effect of their dismissal will be that in many cases they will be entitled to compensation for loss of office after many years in the job. We shall be committed to the payment of compensation for, perhaps, a number of years, and in a couple of years' time, presumably, the valuation panels will have to be built up again to do the job for which they were appointed.
Surely that is nonsense. Why cannot something be done with these people, whose experience in connection with valuation work could be used if there is any question of shortage of staff? They could be transferred temporarily and be found useful work of some kind, rather than be put on the market and be paid compensation while other new people are engaged later to do their job. I am not arguing that they are over-burdened with work. Obviously, they have some work to do, but they cannot be over-burdened until the question of the new valuation lists arises.
What other kinds of things have been going on? The people who have had a very happy hunting ground up to now have been the professional rating surveyors who have been doing special property valuations and various other things on behalf of the Ministry. They have done well, not only as regards volume of work, but because the scale of payment quite recently has been increased by the Treasury. As regards the properties which they themselves have valued, they will be in the happy position that,

whilst they will not be able to appear other than for the Department in the event of the values being contested, they will be able to appeal against their colleagues' valuation of other properties on behalf of owners and they will have a very happy time again in taking fees for conducting these appeals. A great deal of this work should have been done by the Department and not put out to private people.
Now there is to be a further postponement. The effect will be an alteration which will mean that the work that has been done must be done all over again, Why cannot special properties be dealt with? Is it not possible to deal with at least some sections of valuation which have been virtually completed? As far as shops and industrial properties generally are concerned, I believe that a very large part of the work has been completed. Why not give effect to the work that has been done, even if we have not yet been able to overcome the sticky problem of dwelling-houses?
At any rate, comparable properties as between one rating district and another will have been dealt with on a uniform basis as a result of the activities of the Inland Revenue Department. This would mean that some, at least, of the work that has been done need not necessarily be wasted. I am quite satisfied that some of the valuations have been completed for two or three years, and obviously postponement for an unknown number of years must mean that a good deal of work will have to be done again.
What I have said indicates my dissatisfaction with the Bill for the postponement of the new valuation lists. I am dis-satisfied, moreover, not because I appreciate the inevitability of postponement because the work has not all been done, but because the reason for that has been the existence of a kind of feeling. "We are not going on with this anyway, and we need not hurry." There has not been the sense of urgency, certainly during the last 12 months, which earlier it was sought to put into the task.
Certainly my right hon. Friend the Member for Ebbw Vale wanted the job to be got on with, because he wanted the basis for equality to be properly applied, so that all the equalisation grants could be properly applied. That after all, is a most important factor. It


is true, as my right hon. Friend said, that there are rating areas from whose total income something more than 80 per cent. came from Government grant in some form or another. In many cases 40, or nearly 45, per cent. of it comes by way of equalisation grant, as distinct from education and health grants, and so on.
These are very important figures as far as those authorities are concerned, and under that stimulus there is no doubt that they are subject to very heavy commitments. If there are to be any changes in the basis on which Government grant is given to authorities, it is highly important for them to know that there is to be a change so that they can at least see where they are going with the services which they are providing, and also can have the opportunity of making representations to the Minister on the basis of the proper continuance of those services.
Nothing can justify the delay that has taken place or its continuance beyond the physical fact that it exists and we cannot do much about it. All that I ask is that the Bill should be amended to contain a specific date. Having regard to the discrepancies and inequalities that exist, it should not be left to the Minister's discretion to introduce the date and then to postpone it again if he feels so disposed. I believe that the Inland Revenue Department have enough evidence before them on lack of uniformity to make them frightened to proceed with the matter and that this lies at the bottom of the trouble with regard to uniformity. It will mean such an upheaval over the whole country that the Government are afraid to face it. In any case, it must be faced some time, whether now or in a year or two, if equalisation grants are to be continued on a basis which implies uniformity.
That uniformity must be attained. It is the Minister's duty to press forward with all speed. If he has in mind any changes in the structure by which uniformity should be achieved, it is his duty to let the House know and to explain it to us, so that we may have the opportunity of judging whether any new methods that are proposed will achieve the uniformity which is, I am sure, the desire of the whole House.

6.47 p.m.

Mr. Ian Horobin: I shall not detain the House long, because I want to raise a special point of some importance. Before doing so, I associate myself with the argument which has been forcibly put from this side that during this respite the Minister should not close his mind to the possibility of retracing the unfortunate step which has landed us in this difficulty and that valuation should be returned to the local authorities.
We are all agreed that uniformity within a rating authority is necessary; it is common ground, I think, that that was achieved. The only reason for this awkward upheaval, as it has been rightly described by the hon. Member for Southall (Mr. Pargiter), in attempting to make uniformity between different authorities, is the place of rateable value in the equalisation grant. Apart from that, it does not matter in the least what differences there are.

Mr. Pargiter: rose—

Mr. Horobin: If I may finish my argument, I may perhaps save an intervention. If I understood aright the argument of the hon. Member for Southall—and if it was his argument I agree with it—a rateable value, if it ever was a fair measure of poverty, is rapidly ceasing to be a good one, in which case there is no point in preserving it in the equalisation grant formula. I strongly add my voice to those who have said that the right thing to do is to adjust the formula, and then there is no earthly need for going into that awful upheaval of attempting, after centuries of valuation, to obtain an entirely unnecessary equality between Westmorland and Middlesex.

Mr. Pargiter: It bears an important factor in other grants, and in the education grant in particular. The question of rateable value per head is a very important factor in the Government grant. It is, therefore, quite important, apart from the question of equalisation grant.

Mr. Horobin: That is true, but that had not been mentioned in the hon. Member's speech and I did not want to embark any further into the matter. But the same argument applies; the only reason for putting the rateable value in


was that it was supposed to be some indication of poverty. If not, there is no point in having it in. I understood the hon. Member to say that, and to that extent I agree with him. I want to add my voice to those who have said that they believe that we made a false step in centralisation.
The point I want to put to the House is a special one, and I am glad to say that for once in a way we have an important financial point which is entirely nonparty political and on which I hope I shall have the support of both sides of the House. I have particular reason for gratification that this Bill is being brought in because it will allow an opportunity for considering the rating of charitable trusts. As is well known to all concerned with the matter, while charities generally, apart from special exemptions, have never had any legal right to be treated differently from other hereditaments, they have in fact enjoyed special assessments.
One of the very grave anxieties hanging over charities all over the country recently has been the indication that they would be faced with extremely heavy increases of assessment as a result of the fact that the Inland Revenue assessors have no discretion at all. Quite clearly they could not have. I am not going to argue it, but to anyone who knows the history of the matter it is quite obvious.
This particularly applies to some forms of charitable trust with which I happen to be particularly concerned and which I know have the interest of all hon. Members. Above all, it applies to the great effort to provide open spaces in densely built up industrial areas where the possibility of rating on ordinary assessments can produce quite fantastic results which, it is no exaggeration to say, might lead to immediate loss to the charitable beneficiaries. Recently, at least, we had one case which shows the danger of the possibility of pressure being put upon charities by rating authorities where the rate which can be demanded is so heavy as, in effect, to lay the charity open—to put it mildly—to blackmail
I do not want in this debate to detain the House by arguing the whole question. In my view, charities exempt from Income Tax in the interest of society ought logically to be exempt from rates. Alternatively, of course, there is the possibility—for which there are precedents in

Private Acts—of their being assessed at the ordinary assessment but paying rates only on a fixed and small proportion of the normal hereditament. There is at least one precedent I have in mind of one-tenth, but I do not want to argue that question in detail.
What I want to put to the House is that this Bill does give an opportunity for considering this most urgent matter, which I am sure goes quite beyond any party difference which divides us. I hope very much that I shall be speaking for hon. Members in all quarters of the House when I say that this opportunity ought to be taken. I hope we can have an assurance that before there is any new rating roll—either under the mere postponement or by any change in the law before any new day is appointed—opportunity will be taken to go into the whole question of the rating of charitable trusts. They should not face the very serious threat which now hangs over them and which would have been immediate if it had not been for this Bill. This is a special reason why I am very glad that the Bill has been brought in, and I hope we shall be able to take advantage of it in that way.

6.54 p.m.

Mr. Charles Pannell: The hon. Member for Oldham, East (Mr. Horobin) will not expect me to follow him in the very special plea he has made. I should have thought he was wrong on the earlier point he made, not only on the basis of the education rate, but even on the 1929 Act. I should have thought a degree of uniformity was desirable between county and county, bearing in mind the Exchequer grant, to which I will not address myself at this stage. I hope I shall prove the general case that uniformity is desirable.
Whatever we may think on the broad philosophy which divides us on both sides of the House, I take it that we will agree upon one thing—that wherever a child is born, in whatever county, town, or country district, he should have an equal chance by means of public funds to realise his full personality. If that is granted—and ethical considerations should promote legislation—uniformity is a desirable consideration.
I do not necessarily agree with everything my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) said about


this, but it was true that many counties embracing necessitous areas could not maintain a modicum of decent social services. Therefore, I think this consideration comes in. Although this is not the most dramatic sort of legislation which comes before the House, I think it is among the most important, because this does concern everyone who lives in a house anywhere, and I do not think we should allow this question to be deferred easily.
There are the considerations which were advanced by the Minister, but there are other considerations, and I think it good to remind ourselves of what were the conditions before the 1948 Act. More than 20 years ago I was chairman of a local rating and valuation committee, and I have been a member of a county valuation committee. We had our local rating committees fixing their local assessments and, while it is true that the hon. and learned Member for Ilford, North (Sir G. Hutchinson) made some point about the fact that for hundreds of years we were ruled with quinquennial valuation, anyone who has had experience of local government can tell many funny stories about the good old days of valuation.
I was born in Walthamstow, which is not many miles from Ilford, but it was a commonplace for my valuer to speak of the way in which they did things in Ilford, and that was an indication that practice varied from county district to county district. In fact, there was very little uniformity among local rating committees. I moved across the water to Kent, where I live now, and for a time I sat on the county valuation committee whose job in those days was to get something like a degree of uniformity in the county.
Hon. Members—including, I am sure, the hon. Member for Oldham, East—will agree, because he has stated it in equity that we should all pay towards the county precept. But we never realise the difficulties into which we may run. I was reminded of that by my hon. Friend the Member for Southall (Mr. Pargiter), who speaks with great authority on these matters as an ex-chairman of the Finance Committee of Middlesex County Council. We tried to secure uniformity in the county of Kent, and the only way in

which we were able to do it—I believe it was the practice up to the passing of the Act—was that the county council used to pay half the valuers fees, provided the local authority used an approved list of valuers. But, from the county council's viewpoint, we often then had to go to the assessment committee and appeal against the figures of our own county districts. Even to secure uniformity on prefabricated dwellings was a very long and tedious business.
I am not speaking of recent years, and it is not a political point, but in the old days there is no doubt that there were all sorts of pressure groups and all sorts of local considerations coming into the question of valuation. I could cite an authority which used to send a sub-committee of lay persons out with the valuer. A little honest graft among friends there may be.

Mr. Horobin: The argument of the hon. Member is surely taking him rather far. Would he apply the same thing in favour of getting rid of a district valuer?

Mr. Pannell: No, I am not. But I think my hon. Friend the Member for Sowerby (Mr. Houghton) did point out that a district valuer works in an entirely different capacity. His district ranges over a series of authorities and over the boundaries of counties. He is a civil servant. I do not think the hon. Gentleman is on a very good point when he brings that in. But there is no doubt that local prejudices, local pressure, have disturbed values within the counties, apart from anything else.
I was present at the annual conference of municipal treasurers at the time when my right hon. Friend the Member for Ebbw Vale told us that this Act, in effect, made the taxpayer to a degree a ratepayer, which it does; and if the local authorities are going to have a share from the national pudding basin it must not be the local authorities who decide the size of the spoon. Of course he was acting quite logically, but I did turn up some old documents when I approached this debate, including one with which my name was associated, and which was written to give guidance to members of local authorities. It was written about the time of the Act and states:
It will be seen therefore that if the function of valuation remained in the hands of local authorities, there might be a tendency to under-value property, which would have


the effect of subsidising the ratepayers at the expense of the taxpayers to an extent not envisaged in the Bill.
It has nothing to do with the chaotic state of the present valuation lists which has come about by reason of the fact that the definition of gross value as laid down in the Rating and Valuation Act, 1925, had to be followed in the assessment of all properties, but provisions of the Rent and Mortgage Interest Restrictions Act, coupled with the payment of housing subsidies to local authorities and housing associations, the scarcity value reflected in the rents and houses built for owner occupation, render the implementation of the present definition of gross value almost impracticable, as houses similar in character, size, and amenities will have attached to them varying values of serious proportions.
As I say, that was written for the guidance of members of local authorities in the county in which I held office in a political party.
One can go on to refer to many of the sort of things which appeal to us at the time. Those were the conditions. I do not think they were desirable conditions. I do not think those of us concerned with the integrating of local government can defend many of the conditions which existed at that time. There was a general idea to play down valuation, and so the 1948 Act was at least framed—I am not saying it secured it, but we can give credit for good intentions—to secure equity between all ratepayers. The conditions revealed inequity between ratepayer and ratepayer; between town and town; between district and district and between county and county.
The new grant formula conferred benefits on certain hard hit counties, and we are glad of it. I associate myself warmly with what my right hon. Friend the Member for Ebbw Vale said. I am glad that the grant is in advance of the valuation. Not because I wanted it; in the most perfect of all worlds, I should have liked it the other way round. But we had just finished a war and this was the greatest Act since the 1929 Act and it was necessary to do something.
Having said that, and agreed with it, it did seem to me that the valuation should proceed as quickly as possible. We have given out the benefits and we must now proceed to justice, and that is why I regret that this has had to be postponed. The Act also inflicted hardships on other counties and towns. I wish to say a word about Leeds, which I represent, and North-West Kent, which I represented in local government, and in

which the Minister himself is interested. I would quote from a document issued by the Leeds City Council:
As to the local Government Act, 1948, the City Council is receiving a payment under Part V of that Act as 'compensation' for the loss of rateable value caused by the removal of electricity and transport hereditaments from the valuation list.
I shall have something more to say about that in a moment. Therefore the valuation lost in equalisation grants is receivable as rateable value, and here is the point:
Possibly, after revaluation has taken place during the next four years, the Council may be in a position to receive grants.
I think that local authorites who were paid out quite willingly—not "paid out," I will withdraw that—who were disadvantaged in many ways, were philosophic about it. They thought justice would follow, but of course justice has not followed. I have a full return here of all local authorities of England and Wales. I will not trouble the House with them all, but I will take certain selected ones, and I will attempt to be fair in my selection.
Leeds receives nothing. Sheffield—I am not giving an explanation of why this is, I am merely stating facts—receives 3s. 2.21d. Anybody who has seen the two cities may wonder why. Hull receives 8s. 1.78d. Well, under-valuation is notorious in Hull. These are three Yorkshire cities. The hon. and learned Member for Ilford, North referred to the equity between counties and boroughs, but these are three county boroughs within the same county; and to me at least, as a lay person who has given some study to this matter, these sort of figures are inexplicable.
If we take the blitzed towns of Portsmouth, Plymouth and Southampton, we find that these three get nothing. But York gets 3s. 2.73d. Again that seems inexplicable to me. I know York pretty well; it is fairly near the place I represent. I think I know the principles of the 1948 Act. But when one considers the aspect of justice which we want to see, these sort of figures make no sense at all. Birmingham gets 3s. 4.37d.; Bristol gets nothing. I worked in Birmingham for a time, and one might compare the slums of both cities and their industrial potentials. It does not seem to me to make sense at all.
We all know why Merthyr Tydvil gets 31s., and I will not go into that. But why is it that Liverpool and Manchester get nothing, when Salford receives 4s. 1.12d.? Again I know this town. These are figures which wait, these are injustices that wait, upon the deferment we are granting here today. There is no question about that. Therefore, we must not consider these matters lightly.
What about the county? My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) referred to certain views which I hold on that subject. Let us take the County of Kent. My right hon. Friend the Member for Ebbw Vale seems to think that all people who live in South-East England are living on the backs of the industrial workers of the north. With a vested interest in both places I would deny that. As an engineer, I would remind him that greater London has 25 per cent. of all the engineering in the country.
Kent is one of the five counties which do not attract any grant. It is one of the five wealthiest counties, for this purpose, in the country. I suggest that Kent has too great a variety to have the principles of this formula applied to it. Of course, Kent is not completely residential. Round Dover we have the coal miners. In the Medway towns we have a variety of interests. We have the cement workers and the agricultural workers who, with our miners, are our best dollar earners. Then there are many people whom the Minister represents in that part of Kent which is contiguous to the Metropolitan area. In Erith we have the engineering Birmingham of London.
On the basis of 1929, Erith has lost something like a 5s. 4d. rate by derating legislation and this legislation. I have worked out the figures. It appears to me that if one tries to apply this legislation to the County of Kent one has to cut Kent into three parts—the coast, the rural areas and North-West Kent. North-West Kent, because it is balanced against places like Tunbridge Wells, receives no grant at all.
I am not quarrelling with the fact that necessitous areas have this assistance, but anyone who studies the question knows that uniformity is absolutely essential if we are to do justice even by the constituents of the Minister in Bromley. We

must tackle this question of securing uniformity. Are these matters not to be put right? How is this four year deferment to be used? It is a four year perpetuation of manifest injustice. Is it to be used, as suggested by my hon. Friend the Member for Sowerby, to scrap large portions of the Act? I do not know, but I suggest that whatever the Minister does he must seek to see that justice is done by people in different counties.
That is the end, the purpose of all intelligent political endeavour in local government—to see that everyone has an equal opportunity. It is with that in mind that we must approach the question of valuation. Are we to go back to the principle of the hypothetical tenant? I should regret it if we did, but, if we are, then I say flatly that the local authorities had better do the work, not with the old "free for all" but with far more central regulation.
We should need to strengthen the powers of the local assessment committees. They have been set up as valuation courts now. Steps would have to be taken to ensure that their membership was such that those concerned were not applicants for office in the local authority which they were rating. We should have to strengthen the county valuation committees and to avoid long legal processes with the lawyers and valuers. Laymen can settle all these matters. We should have to have a new central valuation committee.
This might be a long job, but it is well worth doing. We should have to set more simple terms of reference than those we have at present. I discussed the difficulties of the present system with a borough treasurer. He told me that he valued his own house from his own professional knowledge. It will be appreciated that before the passing of the 1948 Act the local borough treasurers were the chief officers of the local valuers, and so they knew something about it.
This man called in three professional friends and they all gave him different valuations after working under the directions laid down by the Government Department. They were all perfectly honest men. When I saw the document I was not surprised. I have that document here now. As a matter of fact, it caused some hilarity here because it was rather fathered on the Board of Inland Revenue


by my right hon. Friend the Member for Ebbw Vale, and my hon. Friend the Member for Sowerby, of course, represents in a professional capacity the Inland Revenue Staff Federation.

Mr. Houghton: Yes, but it was malice aforethought on the part of my right hon. Friend.

Mr. Pannell: I am sorry that my right hon. Friend the Member for Ebbw Vale is not here. In fact, this document was not issued by the Board of Inland Revenue at all. It was issued by the Ministry of Health. The date of this document was June, 1950. My right hon. Friend was in possession then, but I very much doubt whether he could have produced this document in three months—

Mr. Dalton: I have never been Minister of Health.

Mr. Pannell: No. My right hon. Friend was Minister of Local Government and Planning when my right hon. Friend the Member for Ebbw Vale was Minister of Labour. Taking the date and working backwards, it is quite possible that he signed on the dotted line.
I must say that I have the greatest sympathy with any officer who attempted to interpret this document. I do not believe that valuation needs this degree of precision in its direction. The hypothetical tenant may have been rough justice, sometimes it was not even justice, but I very much doubt whether we need to go to this extent with every house in the country. I suggest that a few simple rules would have been sufficient.
According to this document on every specification, from external walling, roofs, wall finishes internal, floor finishes, windows, doors, including main internal and front, staircase, joinery fixtures, fireplace, the hot water circulation, the sanitary equipment, the services, the foundation, the damp courses and so on, the valuer is called upon to say whether under certain conditions it is minimum, fair, very fair, good, very good or excellent. It seems to me that that goes past professional capacity. As a matter of fact, having had some experience of professional gentlemen I know full well that they would always let something go. It is said that the rat catcher for very good reasons, always leaves two rats of opposite sexes alive.

I should imagine that the valuer does something like that. Of course, I was not speaking in any literal sense.
In the 1948 Act we had an absolute convulsion in the financial structure of local government. Many of us were dissatisfied with the 1929 Act, but the 1948 convulsion ran side by side with the removal of powers, duties and revenues from the local authorities.
I well remember that, when I introduced my first budget, as finance committee chairman of my local authority in 1938—and this was then a small, non-county borough—that local authority controlled no less than 54 per cent. of all that it attracted by way of rates. Just before I entered this House, when I presented my final budget to that local authority, it then controlled 27 per cent. With that reduction came a reduction in the esteem of local authorities. Perhaps it also made a reduction in the capacity of their members, but, as I left the finance chair of my authority at that time, I do not wish to say anything more about that.
Various services have gone from them—electricity and all the other things—and we can only, in a nostalgic way, express regret. The Education Act was the first Act to begin it, and I think it would have been better if we had considered the future structure of local government before we began to dismember the old. I speak as one with a great affection for local government, because I have served on the councils of counties, urban districts and a couple of boroughs, and for no other reason than that I like it. Wherever I might have lived, I would have aspired to serve on the local authority.
Two important points remain. The distribution of the Exchequer grant until 1956 will be unjust and inequitable, and cannot, in any circumstances, achieve the purpose for which it was introduced. Second, if the basis of valuation is to be the 1939 annual value—and I should regret it—

Mr. Houghton: My hon. Friend can take it from me that it is.

Mr. Pannell: I accept my hon. Friend's word, but I should still regret it. But if it be on the basis of the hypothetical rent, the local authorities are far better equipped by knowledge and experience to


carry out the valuation, and it is a strong argument for the return of the function of valuation to the rating authority, though I would not like to go back to that.
I do ask that, beyond all our arguments here on a highly complicated and technical subject, we should keep the distant end in view, which is justice and equity to all men's children.

7.22 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Marples): We have had a long and interesting debate, which has shown again the expert knowledge which is possessed by hon. Members on all sides on local government matters. It is quite revealing, from the humble position of a Parliamentary Secretary, to listen to the experts with years of experience of local government. My right hon. Friend, at the opening of his speech, said he was not an expert, and quite fervently I echo that admirable and candid admission. My own experience has been confined to a long argument with a local authority—as my hon. Friend the Member for Hampstead (Mr. H. Brooke) knows, it is in London—when I complained that the assessment was too high. I was at the losing end of the battle, and I had to pay what I considered was an excessive figure.
Expert knowledge of rating is not, strictly speaking, necessary on the contents of this Bill, though it may be on other matters outside the scope of the Bill. The right hon. Gentleman the Member for Ebbw Vale (Mr. Bevan) said that the subject of rating was really nonpolitical, but highly technical and complex; but this particular Bill does not deal with the question of how rating assessments should be made. It really deals with one issue only, and that is the postponement of this particular valuation which was due to take place.
I shall try to answer some of the points which have been made by hon. Members in the debate, but I want to make my own position clear, because most of the speeches have dealt with matters that are not actually in the Bill.
If there is any blame for the delay that has taken place, I do not think it should be directed at my right hon. Friend, because the earlier Act was placed on the

Statute Book in 1948 and it is now 1952. That is a space of four years, and we have been in office only for the last year of those four. Therefore, I do not think that any accusation or allegation of delay should be made against my right hon. Friend.
This Bill does only one thing—it postpones the date, but it does not alter the basis of valuation. My right hon. Friend said that the main reason for this is the shortage of valuers, and that is the main reason for the Bill being introduced—a shortage of professional valuers. It is a massive administrative task to value all these properties, and the number of valuers whom the Inland Revenue engaged was not adequate for the purpose. The subsidiary but not the main reason for the delay was that the basis of house valuation laid down in the Act had proved in practice to be unjust and almost unworkable.
The reason it is unjust is that the pre-1918 houses were valued on one basis and the post-1918 houses on another basis. The pre-1918 basis on which the houses were valued was the actual rent of comparable properties in 1939, roughly speaking, and, in the case of the post-1918 houses, the hypothetical costs of construction and the hypothetical 1938 site cost. Although the right hon. Gentleman the Member for Ebbw Vale abolished the hypothetical tenant, we still have to have a hypothetical builder or a hypothetical cost of construction.
What happened when preliminary samples were taken was this. They showed that the pre-1918 houses, on this particular basis of similar size and amenity, were rated most unfairly and excessively highly as compared with modern houses. If that is so, and the preliminary samples show that it was so, there are only two alternatives—to leave it to be unfair as between house and house, or to alter it.
The hon. Member for Hamilton (Mr. T. Fraser) complained that, as between one Scottish town and another, the Exchequer equalisation grant had operated unfairly, and he felt a burning sense of injustice, but I do ask him what he would have thought if the preliminary samples did, in fact—as they certainly did—show this unfairness. Would he be pressing the present Government to put into operation an unfair basis, because a person occupying


an old house would be rated higher than a person occupying a new one, which would be manifestly unfair?
That was not the only inconsistency, but it was not possible, under the framework of the Act, to alter it, because the actual words used are "the actual rent," which do not permit of a very liberal interpretation. I ask hon. Gentlemen opposite, if that is so—and I ask them to accept my word that it is—what they would want us to do. Would they wish us to perpetuate the unfairness, or alter the basis?

Mr. Houghton: Does the House understand from what the Parliamentary Secretary has said that the Minister does propose to alter the basis?

Mr. Marples: I was coming to the hon. Gentleman's point later on. My right hon. Friend has not yet made up his mind what precise action he is to take about valuation, and what he is doing now is to take samples of methods so that he can make up his mind. The hon. Gentleman made an impassioned speech on this issue, but I should like to ask him whether it is not a fact that, if a little more research had been done and samples taken before the Act was placed on the Statute Book, we might not be in the mess we are in today, and that not only applies to rating, although I do not want to be controversial.
It is necessary to carry out a few pilot schemes so that my right hon. Friend, when he comes to the House, can really deploy his case and be certain of his facts, instead of coming here to put before the House something that is unworkable. The answer to the hon. Gentleman's interruption is that my right hon. Friend is considering it.
The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) asked why people were being sacked.

Mr. Dalton: When we have too few.

Mr. Marples: The right hon. Gentleman really must not merge bodies together in that way, because what is needed are not only valuers but referencers and estimators. The people discharged were estimators. The people we need are professional valuers. We do not want batsmen we want bowlers, to use a cricket analogy.

Mr. Edward Shackleton: What does the hon. Gentleman mean by "professional valuers"?

Mr. Marples: A referencer is an individual who measures the physical size of the house. He is solely concerned with taking physical and linear measurements. The estimator is the gentleman who makes monetary assessment of the physical measurements. He applies the cost element to the physical measurements. The valuer is a professional man with training who has to use judgment and perhaps decide on what basis the house could be let. He must have a wide range of knowledge and professional judgment in valuation over the country as a whole. The people who were needed for this Measure were professional valuers and the people discharged were estimators.

Mr. Dalton: Does that mean that all the work due to be done by the estimators has now been done? How did the Ministry manage to get rid of them all?

Mr. Marples: The basis of valuation on which they would have to be engaged is unworkable. There is no need to have people going round making physical measurements when there is no one to put a value on those measurements. There is no point in going ahead with a whole series of valuations if the Minister has not made up his mind as to what is required.

Mr. Houghton: The Minister has abandoned the existing basis of assessment and because of that he has now discharged the staff who were recruited for work on that job.

Mr. Marples: It is not a question of either abandoning it or not. There are grave doubts whether it should be done, and this being so, it would be the height of folly to go on with measuring all the houses in the country.

Mr. Houghton: It obviously cannot be done if the Ministry sack the people who could do it.

Mr. Marples: I think that the hon. Member is making too much of that point and that position. The right hon. Gentleman the Member for Bishop Auckland asked whether we would go ahead with all hereditaments other than houses. My right hon. Friend has made it clear, in answer to a Question about three


months ago, that he would not do that because it would be excessively unfair.

Mr. Dalton: Would it not be fairer if we were to remove one element in the lack of uniformity? If there is a lack of uniformity now, as we all know that there is, both as regards dwelling-houses and other classes of hereditaments, would it not be taking one step towards fairness if we carried on with this work, about which I gather that there is no difficulty, in the case of hereditaments other than houses?

Mr. Marples: I think not. It is better to bring in a scheme as a whole rather than piecemeal. That is what my right hon. Friend has decided, after giving the matter careful consideration. The hon. Member for Hamilton (Mr. T. Fraser) and the hon. Member for Southall (Mr. Pargiter) raised the question of uniformity and the unfair operation of the Exchequer equalisation grant because of the present system of rating. They are quite right. The equalisation grant of £150 million is given partly by reference to the produce of a 1d. rate, and it does make uniformity of basis necessary from the national point of view. Great unfairness will otherwise result if the Exchequer equalisation grant is distributed on the present basis.
We have to consider this against the background of the present equalisation scheme. That was the point also made by my hon. Friend the Member for Hampstead. In answer to a Question on 12th March, 1952, my right hon. Friend said:
… the Government have decided to begin in the new financial year an investigation into the operation of the equalisation grants. It must be understood that the Government cannot contemplate changing the system in any way which would increase the burden of grants on the Exchequer but this investigation will have the scope and be conducted in the manner required for the statutory investigation in the year in which the revaluation comes into operation."—[OFFICIAL REPORT, 12th March, 1952; Vol. 497, c. 143.]
So already discussions have taken place with the appropriate local authority organisations. They started about three months ago. And in effect we are looking at the operation of the Exchequer equalisation grant in order to see if the operation of it can be made fairer to the local authorities concerned.

Mr. Pargiter: It would be fair to say that the discussions were entirely tentative. Surely there is no question of any conclusions having been arrived at.

Mr. Marples: No conclusions have been arrived at, but the point is that the thing is being explored and the point made by the hon. Member for Hamilton and the hon. Member for Southall was that it was unfair as it stands now. We concede that point at once. It is unfair and that is why discussion started.
My hon. Friend the Member for Hertford (Mr. Walker-Smith) asked if we would look at a point about new towns. Perhaps he will forgive me for not giving an answer. However, we will read his remarks tomorrow and digest them, as we always do, very carefully. The hon. Member for Sowerby (Mr. Houghton) accused the Inland Revenue of failing to recruit sufficient valuers, or of not being energetic enough about it. If his allegations are right, then the burden of blame falls on the previous Governments, because the Act was on the Statute Book in 1948.

Mr. Houghton: I would never blame any Government for what the Board of Inland Revenue does.

Mr. Marples: The hon. Member knows the Inland Revenue, and I suppose that in his time he has done some things for which no Government would like to be blamed. I do not think the previous Governments were to blame for this, for the reason that it is always difficult to recruit temporary people, whatever the job. It is difficult in commerce. It is a question of pensions.
I have had great difficulty in recruiting even on a five-year or ten-year basis. It was difficult in connection with war damage, when technical assessors could not be obtained. It is difficult in the new towns where civil engineers cannot be obtained. I do not think that the Inland Revenue or the previous Governments are to blame.
The hon. Member for Leeds, West (Mr. Pannell) asked some interesting questions, none of which were concerned with the contents of the Bill itself but were concerned with the next Bill which might be introduced if my right hon. Friend decides upon another basis. But I am disappointed with him, because he deprived us of some enjoyable minutes with the


right hon. Gentleman the Member for Ebbw Vale, who spent a lot of time blaming the Inland Revenue for a complicated form which was approved by the right hon. Gentleman's Department when he was in office. It was not only approved by him but was defended by his Parliamentary Secretary in an Adjournment debate in this House. It was introduced by the right hon. Gentleman who now attacks the wicked Tories for it. I am sorry that the right hon. Gentleman is not in his place.

Mr. Houghton: So are we.

Mr. Marples: I thought the whole affair had blown over, but now we know for certain that it has not blown over or perhaps I should say healed. The entire basis of the speech of the right hon. Gentleman was erroneous and I will say no more about that point.

Mr. Pannell: The hon. Gentleman should not say it is irrelevant. I was dealing with the vacuum that had been created by the perpetuation of injustice because of the deferment of the dates. That is not irrelevant.

Mr. Marples: The hon. Gentleman is elevating himself to the position of his right hon. Friend the Member for Ebbw Vale. I was referring to the right hon. Gentleman. Now we know which way the hon. Gentleman voted.
My hon. Friend the Member for Hertford asked if my right hon. Friend would bring the Measure in as soon as possible and not delay it. The answer is that my right hon. Friend in his opening speech made the following statement. I think I took it down right: "After so many pitfalls and disappointments I would hesitate to give a definite date, but we are very anxious to get it finished by 1955 or at the latest by 1956." The answer to my hon. Friend, therefore, is that my right hon. Friend will try to bring the Measure in as quickly as possible.
My hon. Friend the Member for Oldham, East (Mr. Horobin) raised a point about charitable trusts. Additional de-rating to help special interests is, generally speaking, undesirable, but in the case of charities a special scheme is now under discussion between the local authority associations and the National Council of Social Services. I think it is up to the

National Council of Social Services to make their points and we must await the results of those discussions.
I have dealt briefly, I admit, with some of the points raised during the debate, but the main purpose of this Bill is not to alter the basis of valuation, as I said at the beginning; it really is to postpone the date, and that is all the House has been asked today. It has not been asked to agree to any alteration in the basis of valuation. I hope, after the long and interesting discussion which we have had, that the House will give this Bill a Second Reading.

Mr. Pargiter: Could the hon. Gentleman answer the question that I raised about the employment of people who will not be used immediately on valuation panels in the Department? They have got a useful knowledge and I suggest that it would be inadvisable to discharge them and, incidentally, possibly pay them compensation.

Mr. Marples: We will look at that point in the morning. If the hon. Gentleman would like to elaborate on it further by writing and sending us details about any particular valuers he has in mind, he would probably be of great assistance.

7.43 p.m.

Mr. Edward Shackleton: The last remarks of the Parliamentary Secretary are quite sufficient reason for continuing this debate. He has said that all that the Government are seeking to do today is to postpone the effect of an Act and that we need not bother ourselves any further, since it is so simple. But what we should like to know even now are the precise reasons for the postponement.
There has been quite an unnecessary element of confusion injected into the debate by the rather simple and easy approach that the Minister adopted at the beginning. The Minister is obviously a very old hand, and the fact that a Bill is merely a two-Clause Bill does not lead him into thinking that it is necessarily not going to be a very contentious one. None the less in his opening speech he chose—and it was worth trying—to put the matter across as a very simple, uncomplicated matter. It clearly is a complicated matter because we have been told that since it is going to be necessary to postpone the completion date for the


valuation, we may as well take the opportunity of looking at the basis on which this work is being carried out. That, as I understand, is the argument he put forward.
It is, at the same time, quite clear that, although the Parliamentary Secretary may say that the Minister is only considering alternative ways of tackling the problem, the Minister has decided that the existing method has got to be abandoned. It would be fairer to the House if we had been told that. Otherwise we cannot account for his decision to sack this large number of estimators.
We can look at this problem from two points of view. We can look at it, first of all, from the point of view whether or not it was physically possible to continue with the work of valuation. We are told that it was not because the valuers were overloaded with work and that whatever the estimators might turn in would not be, so to speak, processed by the valuers.
I suggest that here the effect of a long-term campaign against this whole principle has had some influence on the Departments concerned, and I think that a number of quite unnecessary things have been done which have impeded the work of continuing on this present basis. For instance, I understand that the valuation staff—what the Minister called the qualified professional valuers; I am not quite sure whether they are, but I imagine that they are local rating officers who have been transferred to this job—were so behindhand that they could not keep up with the work that the estimators turned in.
But I submit that they were also turned on to work that could very well have waited. For instance, they were turned on to a form of interim valuation in which every hut or pigeon loft on spare bits of ground belonging to people was brought in for valuation purposes. This sort of work could easily have been left until this great scheme for establishing uniformity throughout the country had been completed. While I am on that point, since we have had discussions on new towns and charities, may I make an appeal on behalf of the pigeon fancier? There are pigeon fanciers who today are being called upon to pay rates on their pigeon lofts when never before have they

been called upon to pay such a rate. That is a point which I hope the Minister will bear in mind.
I suggest that it would have been better if the Minister had told us that he finds the present system wrong and that, therefore, preparatory to abandoning it he is asking the House to agree to postponing the Measure. We have tried to pin the Minister down on this. He is saying that he is merely taking the opportunity, while behindhand in the work, of bringing in a Bill for its postponement. Because he has got to postpone it anyway, he is going to look at the principle again. But if he thinks it is wrong, he would have to look at it again whether or not the pile-up of the work led him to postpone it. I know the Minister has been here for a long time and it may be difficult to put these arguments clearly, but none the less I think he might have come a little cleaner on this point.
I am very sorry also that he did not make any reference to the unfortunate staff who have been so unceremoniously thrown out of their job—the estimators whom some official in the Inland Revenue Department—I hope he is not a member of the union of my hon. Friend the Member for Sowerby (Mr. Houghton)—described as pin-money people. These estimators who are brought in to do a very important job of work are simply described as pin-money workers—

Mr. Marples: Who called them pin-money workers?

Mr. Shackleton: An official of the Inland Revenue Department. I have the letter here.

Mr. Marples: I thought the hon. Gentleman said that somebody on this side of the House had referred to them as pin-money workers.

Mr. Shackleton: No, certainly not. I was sorry that no reference was made to the very excellent work that these estimators have been doing. It would have been gracious if some expression of regret had been made about the misfortune which has befallen many people who have been working very hard under difficult conditions and trying enthusiastically to tackle something new and who now find themselves out of a job often without very much prospect of getting another.
I think hon. Members on this side of the House have made out an overwhelming case for some form of uniform basis of rating throughout the country. I hope the Minister will consider those arguments and, whatever he may have to do—whether he has to bring in new legislation or can do it within the framework of the existing Acts—I hope that he will do his utmost to carry forward the principle which was enshrined in the 1948 Act.

7.50 p.m.

Mr. Eric Fletcher: As my hon. Friend the Member for Preston, South (Mr. Shackleton) said, it is certainly true that we have had a longish debate on this subject; but it has not been unduly long having regard to its importance. I rise now only for two or three moments. This subject is undoubtedly one of the greatest importance to local authorities, and for more than one reason. As other hon. Members have pointed out, it is perfectly true that for a number of years past local authorities have suffered from the fact that various services and forms of activity which they have enjoyed over a long period of years have been taken from them. The last to be taken from them was that of local valuation for rating purposes.
Anybody can understand and sympathise with the sense of grievance which local authorities experience when a service for which they are equipped is taken from them; but that decision was taken—and, I think, rightly—in 1948 and, since then, local authorities have been looking forward to the day when this central valuation of all hereditaments could be completed so that we could have, first, a new common basis of valuation throughout the country and then, with that as a basis, begin to build upon it in order to arrive at a fairer and more equitable distribution of the rate burden as between one local authority and another.
That, as I understand it, was the basic conception. Therefore, it is profoundly to be deplored that there should be any avoidable delay in consummating the ideal which we set before the country in 1948. Nothing I have heard today, either from the Minister or his Parliamentary Secretary, has indicated any adequate justification for this further delay.
There is another reason why local authorities profoundly deplore this delay. It is a reason which, I should have hoped, would have found an echo in the heart of the Minister—because I am sure that we all do him the credit of wanting to support and assist local authorities—and which I hope he will bear in mind in whatever time-table he is going to set himself for implementing this system of central valuation.
One has heard it said over and over again in local government circles that of late years there has grown up a sense of frustration due to the fact that the independence of local authorities has been sapped and undermined by the increasing inroads of central administration. There was a day when local authorities bad something like autonomy in their localities. There was a day when Parliament left local authorities practically unfettered as to how they raised and spent money. It was only in the latter part of the 19th century that the process began which has been so much developed in this century—of interfering more and more with the historic autonomy and independence of local authorities.
Hon. Members on both sides of the House have habitually paid lip service—and I do not say that in any opprobrious way—to the obvious desirability of having a healthy and virile local government. But, if we are to achieve that ideal, one of the essentials is that local authorities should have a greater measure of local autonomy. The great significance of this Bill is that it goes to the root of the financial resources of local government. We happen to enjoy—if that is the right word—a system of local government in which their only source of revenue is rates. Therefore anything that affects rates, whether it is a valuation list, the rateable value of hereditaments or the question of Exchequer contributions, is of prime importance to local authorities.
I do not know whether the Minister is going to continue that policy. The Minister knows as well as I do that he has had repeated representations by the Association of Municipal Corporations and others to the effect that local authorities should be given additional opportunities of raising revenue. Those additional opportunities would be an important contributory factor towards giving them greater independence and autonomy. The


Minister may not have had time to apply his mind to that problem, but it is not necessary that local authorities should be confined to rates for their revenue.
In other countries there are matters of local taxation. It would be possible to appropriate some specific national tax collected in a locality, for example, entertainment tax or some similar tax. I do not want to be misunderstood. I am not advocating any of those measures, but I am urging that in their absence it becomes all the more important that the Minister should do everything he possibly can to expedite the provisions of this central valuation list, because it is linked with a further point—the question of de-rating or the abolition of de-rating—which one or two of my hon. Friends have already mentioned but to which no reference has been made by the Parliamentary Secretary.
Here again, the Minister knows perfectly well that there is persistent pressure from local authorities to abolish the de-rating which was introduced in 1928 in circumstances which were totally different from those which exist today. There may well have been a case for de-rating 25 years ago. In those days there was unemployment; there was economic distress and there was a real necessity to give some assistance to industries. But that de-rating was a concealed subsidy.
I hope very much that we shall have from the Minister before long the fact that he has persuaded himself of the cogency of the repeated arguments addressed to him by the very responsible local authorities who have given a great deal of thought to the matter of the desirability, in the interests of healthy and autonomous local government, of introducing a Measure to abolish de-rating.

Mr. Deputy-Speaker: I do not see how that can be done on the Bill.

Mr. E. Fletcher: No, Mr. Deputy-Speaker, it cannot be done on the Bill, but the Bill seeks to postpone the date when it might more easily be done. One of the reasons why we object to the postponement is that we want to bring centralised valuation into force at the earliest possible moment. It would then be easier for the Minister to apply his mind to the other matters.
That is why I am so affronted that all these people have been dismissed. I do not know how many there are, but we have been told that a number of people who have been engaged in bringing the centralised valuation into existence have been dismissed. We have not been told why. We have heard about the difficulty of filling up forms, but is there any reason why the Government should not proceed with the rating of industrial properties and shops which they can rate? There does not seem to me to be any valid excuse for this long postponement.
I have intervened because I do not think it right for me to sit silently and not register my protest against the inactivity and the regressive policy which seems to be so symptomatic of the Government's whole outlook and is particularly reflected in the Bill.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Wills.]

Committee Tomorrow.

Orders of the Day — PURCHASE TAX (UMBRELLAS)

8.2 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): I beg to move,
That the Purchase Tax (No. 7) Order, 1952 (S.I., 1952, No. 1821), dated 15th October, 1952, a copy of which was laid before this House on 16th October, 1952, in the last Session of Parliament, be approved.
The effect of the Order is to impose Purchase Tax at a rate of 100 per cent. on parts and fittings of umbrellas other than covers, ferrules or material shaped for use in the manufacture of covers. The purpose of the Order is to deal with a means, which has already been exploited by one company, of evading the Purchase Tax on umbrellas. Perhaps it would be for the convenience of the House if I explained the method of avoidance, as that of itself will make clear the method of checking the avoidance.
A certain manufacturer of umbrellas on a substantial scale has bought up a number of moribund companies in order to exploit the general Purchase Tax exemption limit under which manufacturers generally of output of less than £500 per annum


are not registered for tax. The companies which have been bought up—they were originally some 26 in number, but I understand that the number has increased—purport to buy umbrella components in their own name and then purport to employ the parent company—which is, of course, the only real operating body in the whole outfit—to make up the umbrellas for them, and then they equally employ the parent company to market the umbrellas in the name of the subsidiary company. Each of the subsidiary companies then so arranges things that it has on its own account sold less than £500 worth a year and so comes underneath the registration limit. In this way tax is completely avoided.
As I told the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow) on 30th October in reply to a Question, the loss of tax through the use of this expedient would be, so far as this company is concerned, at an annual rate of between £10,000 and £20,000. What makes it more necessary to deal with it is that if this wholly unfair method of competition against the manufacturers who follow the normal procedure were allowed to continue they would be placed in so bad a competitive position that I understand it would not be unlikely that they, too, would feel that they were bound in their own commercial interests to adopt the same method of avoidance.
The Order will certainly take most of the profit out of this method of avoidance. The registered manufacturers will be able to continue in the normal way to buy their umbrella components tax free, since under the ordinary Purchase Tax law registered manufacturers can buy the goods tax free. Unregistered manufacturers, such as the nominal subsidiaries in the case which I have described to the House, will have to buy their components subject to the tax. Their sales of the complete article, as they are below the registration limit, will continue to be free of tax.
The tax on the components has been placed in the Order at the rate of 100 per cent., whereas the ordinary rate of tax on a completed umbrella is 66⅔. The reason for the differentiation is twofold; first, that the made-up article is naturally, by reason of the labour put into it, of greater value than the separate components;

and, second, because some of the components, for reasons which I will explain in a minute, have been omitted from the Order. That is the substance of the matter except for the exceptions to which I have referred.
The first of the exceptions is designed to ensure that wooden walking sticks and their ferrules shall remain tax free. The House will recall that those walking sticks were made tax free recently as the result of representations made to us by hon. Members on both sides of the House that there was something rather objectionable in subjecting the white walking sticks used by the blind to Purchase Tax. It was found that it was not possible to distinguish between those walking sticks and the others, and so we exempted all of them. That exemption is protected.

Mr. Eric Fletcher: Will the hon. Gentleman be good enough to explain precisely how that protection arises in the form of the Order, because it is not apparent?

Mr. Boyd-Carpenter: I wholly sympathise with the hon. Gentleman, because, when the draft of the Order was first placed in front of me, I raised precisely that question as I had been a little concerned about the exemption in question. It arises this way. The articles subject to tax are parts of walking sticks and not walking sticks. Walking sticks of wood remain immune, and a specific exemption is made for the ferrules, so that a wooden walking stick and its ferrule shall remain tax free.
Perhaps a more important exception is in respect of the covers. They are also excepted from the Order, for it does not apply to them. Perhaps I might in that connection be allowed to mention the fact that two of my hon. Friends who are interested in the question of tax upon covers have intimated that interest to me. As I see it, this Order does not apply to covers, and I should not be able under the rules of order to deal with their points. However, I have no doubt that channels will be found in the ordinary way to discuss the matter with them.
The reason for the exclusion of covers is that the stuff of which they are made is subject under a totally different provision to tax at 50 per cent., and the cloth used in them is indistinguishable


from the other cloth which carries that weight of tax. We have been anxious to avoid putting an undue tax on the umbrella repairer, and no doubt it is the experience of hon. Members who use these implements that the part of the umbrella most likely to require repair is, of course, the cover.
That is the reason for this Order. It is simply designed to block the hole which the ingenuity of one firm had already found in the tax system. Whatever hon. Members may feel either about Purchase Tax in general or about the particular rates applicable to particular articles, they will all agree that it ought to fall fairly and equally, and it would be quite wrong for the Government, when they become aware of a particular method of evasion, to allow that method of evasion to continue. We believe that the method we have adopted will take the profit out of this expedient and cause it to cease.
The Order is, of course, already in force under the normal procedure. It became operative on 20th October. It is too early for me to be able to tell the House that it has definitely checked this expedient, but, on the other hand, so far as we can gather it appears to be successful. However we shall watch its operation, and if it should prove inadequate we should not hesitate to come to this House and ask for any further measures that might be necessary.

Mr. R. T. Paget: Before the hon. Member sits down perhaps he will answer me this question. This appears to be a proposal which, in effect, imposes a new tax in the middle of the year and not by the Budget in the ordinary way. Can the hon. Member tell us what precedents there are for that?

Mr. Boyd-Carpenter: There are a great many. Speaking from memory, it is the Finance Act, 1948, which gives permission to vary Purchase Tax at any time by the use of a Statutory Instrument. The only difference is that where that tax is diminished it is done by the negative procedure; whereas here, as the hon. and learned Gentleman has pointed out, there is an increase, the affirmative procedure is required. That, of course, is why I am moving the adoption of this Order.

8.14 p.m.

Mr. Eric Fletcher: Before saying a word about the merits of this Order, may I say that I think the House will appreciate the point my hon. and learned Friend the Member for Northampton (Mr. Paget) raised because, while it is perfectly true that Parliament gave the Treasury power in the Finance Act, 1948, to vary tax by a Statutory Instrument, the present Government will recognise, as the late Government recognised, that the power should only be exercised in exceptional cases. In other words, it is obviously desirable that, where changes in the rate of Purchase Tax or the addition of articles to the liability of Purchase Tax take place, that they should in the ordinary way form part of the discussion in Parliament following the introduction of the Budget and the annual Finance Bill. It is only in some exceptional cases that the machinery of the Statutory Instrument can be justified.
The whole House will agree that this is clearly one of those exceptional cases. The Treasury, having detected an ingenious device for avoiding Purchase Tax by manipulating various parts of an umbrella and similar articles and having a series of companies to do it, it was obviously very desirable that that method of evasion should be checked at once rather than wait until another Finance Bill was introduced.
I should like to ask the Financial Secretary how long this practice has been going on? Can he tell us whether the practice of having these numerous companies dealing with parts of umbrellas has been in existence for a long time? Can he tell us whether there is any reason to suppose that a similar scheme is being adopted in regard to other articles? As I heard the Financial Secretary's speech about the device of having a number of related companies selling below whatever is the minimum figure before tax is extracted, it occurred to me that if this were possible in connection with umbrellas, sunshades, walking sticks and canes, it was not beyond the bounds of possibility that other ingenious firms may be adopting a similar method of trying to avoid Purchase Tax on articles which are made up of relatively easily assembled small parts. I hope we can have an assurance that any similar device relating to any


other comparable article is under observation, or, if not, that steps will be taken to look out for it.
With regard to the details of the Order in question, during the hon. Member's speech he was good enough, in answer to my question, to tell me that, as has always been the case in the past, ordinary wooden walking sticks are exempt from Purchase Tax.

Mr. Boyd-Carpenter: It has not always been so in the past. They were, in fact, relieved of tax a short time ago.

Mr. Fletcher: I am much obliged. They are still relieved from Purchase Tax, and that is so notwithstanding the fact that most of them have a ferrule at the end of them, because that is the normal and most convenient method of making a walking stick. The hon. Member did say that exemption applied only in the case of wooden walking sticks. I would not attempt to argue the question whether there should be any differentiation between wooden walking sticks and any other walking sticks. That possibly may be a question for consideration on some other occasion, but I do not think that that is a question which arises tonight. I merely mention it so that it can be considered.
Umbrellas and sunshades fall into a different category. I gather that one of the reasons why umbrellas and sunshades are referred to in this Order in conjunction with walking sticks is chiefly because the same kind of parts—ferrules and other parts—are probably interchangeable for umbrellas and walking sticks. I do not think it right that the latter part of the Order should remain in that form. I do not think that one can always draw a distinction between an umbrella and a sunshade. Doubts have been expressed in my hearing whether a particular article is an umbrella or a sunshade. Fashions in umbrellas change as they do with sunshades, particularly in some universities. It is desirable that they should be separately mentioned in the Order.
I am prepared to support the Order. I hope it will be agreed to. I am glad to have the assurance that walking sticks remain exempt, and that this particular device for evading Purchase Tax has been detected and will now be stopped.

8.22 p.m.

Sir John Barlow: I am grateful to the Financial Secretary for explaining this small Order so lucidly. There are one or two points I should like to mention, but before doing so I must, in accordance with the custom of the House, declare my interest in the matter. I have the honour to be President of the Federation of British Umbrella Manufacturers, and I am interested in the manufacture of umbrellas myself.
This evasion, which has gradually grown up in the manufacture of umbrellas, has been a running sore in the trade for some time. If it had been allowed to continue it would have caused chaos. I would point out that the proposals which the Financial Secretary has put forward tonight are not likely to close the loophole effectively. He described to us how certain companies have had a very large number of small subsidiary companies, each operating to a maximum value of £500.
Purchase Tax, which is 66⅔ on an ordinary ladies' utility umbrella valued at about 27s. 6d. in the shops, amounts to 8s. The manufacturer is making and selling to the wholesaler for about 10s. 6d. or 11s. 6d. The wholesaler would sell it for about 12s., and on that basis the Purchase Tax would be assessed at 8s. The article is finally sold in the shops at about 27s. 6d.
It is computed by the trade that the 100 per cent. tax on component parts would amount to only about 4s. for a similar umbrella. These small companies, which are already in existence, are getting an advantage of 8s. an umbrella. In the future they will only be able to get 4s. extra profit instead of the whole 8s. This alteration may prevent new companies from being formed, but it will not prevent existing companies from going on and continuing in this way. For this reason, I think the proposal is not sufficient to stop the gap, and I hope that the Financial Secretary will consider the matter again.
There is a further hardship. It has been the practice for a great many years for certain small shopkeepers, such as barbers, to do small repairs to umbrellas. They have purchased their components in the past free of tax. Now they will have to pay 100 per cent. duty on them.


That heavy duty will largely kill that industry of small people. I am very reluctant to see that happen, and I again hope that the Financial Secretary will reconsider this matter.
There is the much larger subject, which I cannot go into tonight, of Purchase Tax itself. It should be out of order if I did so, but I can say that the anomalies in regard to Purchase Tax on umbrellas are as extraordinary as with other commodities. I again ask my hon. Friend to consider this matter further and, if he wishes to close the present loopholes, as I hope he does, that he will do it more effectively. I think he will find that reducing Purchase Tax on umbrellas from 66⅔ to 33⅓ is much the most effective way. That would help the trade and the Revenue, as well as exports, which are being very seriously affected at the present time by the diminished trade.
Exports in umbrellas were relatively small before the war. In 1938, they amounted in value to £133,000. in 1947 the value was nearly £600,000 and last year it was £846,000. Unless we have a really settled and reasonable home trade in umbrellas, we shall lose a great deal of those very valuable exports. For this reason, and for other reasons with which I will not trouble the House tonight, I hope that the Financial Secretary will consider this matter again most carefully.

8.28 p.m.

Dr. Barnett Stross: The House is greatly obliged to the hon. Member for Middleton and Prestwich (Sir J. Barlow), who has just made his contribution and told us of his interest. He has warned us of something that we have not always tended to appreciate, that even the smallest fragment of legislation can be accompanied with serious complications unless the very greatest care is taken. I am affected by the hon. Gentleman's argument that a group of craftsmen who are accustomed to repair umbrellas must now pay 100 per cent. Purchase Tax for the small parts they need, and may in consequence be driven out of business. I am certain the Financial Secretary would agree that he did not have that in mind when he brought this Order before the House. I therefore add my plea to that of the hon. Gentleman in hoping that it can be reconsidered. This

somewhat unhappy attempt at rationalising an industry by having innumerable firms who spend only £500 and manufacture one simple article, thus escaping their obligation, must be stopped, because nobody wants to support that unhappy enterprise.
The whole question of the £500 limit should be considered. We know it has been useful in certain circumstances. For instance, hon. Members would not get a cheap and attractive Christmas card so easily without it. Also the Financial Secretary will remember that not long ago I went with him on a deputation regarding artists who produce their own lithographs but I was not fortunate enough to persuade him on that issue. I mention that because I was interested in noting how he explained why this requires a positive Resolution. It is because it asks for an increase, whereas it would always be possible to decrease Purchase Tax by means of a negative Resolution without it having to come before us at the time of the Budget.
Either we reduce the tax to 33⅓ per cent., so that temptation is taken away from those who have been attempting to evade the law or using a loophole in the existing law, or we must get rid of Purchase Tax on umbrellas altogether. After all, the umbrella is not only a symbol of authority for a city gentleman who never unfolds it, it is a necessity for the housewife. Umbrellas are really needed by women who go shopping in all weathers. Men do not seem to wear them so much, and we unhappy masculine mortals when it rains have to find some lady who will give us the shelter of her umbrella. Sometimes we are fortunate, sometimes we are not so fortunate, and are lucky to escape an injury to our eyes or to some other part of our face or head.
With an export reaching £846,000, with an industry which contains an old-fashioned type of practitioner for its repairs who will perhaps be put out of business by this proposal, and after the plea made by someone who knows more about the industry than the rest of us put together. I hope that the Financial Secretary will reconsider the decision and meet us by withdrawing the Order and bringing before us another one in a better form.

8.33 p.m.

Miss Irene Ward: I appreciate the reason which has prompted my hon. Friend to bring forward this Order, and I am glad that his reason is supported by all sides of the House. I notice, however, that it is always possible for the Treasury to bring forward something which it feels to be essential, but that it is difficult to get proper consideration given to the other side of the case. I have no particular interest in umbrellas, so I have no interest to declare, but before I get out of order, Mr. Deputy-Speaker, let me say at once that it is ridiculous to have Purchase Tax on umbrellas when mackintoshes mostly do not carry it. It is grossly unfair—

Mr. Deputy-Speaker (Sir Charles MacAndrew): The hon. Lady said she wanted to say something before she got out of order. She is out of order already.

Miss Ward: I have now made my point, Mr. Deputy-Speaker, but I think it is ridiculous to have competition between mackintoshes and umbrellas to the detriment of the latter. I want especially to emphasise the case of the small umbrella repairers. I come from a famous part of the country, Tyneside. Ever since I was a child, and that was a long time ago I have been in the habit of going with my family to a well known umbrella shop which has carried out for us a lot of small repairs. At the end of a letter to me this firm has put the following plea, which I commend to my hon. Friend:
You might be misled by our letter heading as Umbrella Manufacturers, but during the war we were asked to concentrate on repairs by the Board of Trade. We have not been able to get back to manufacturing on account of Purchase Tax.
That puts the case quite simply.
I should have liked to hear the names of the people who had been behaving in this fashion, because when people play dirty tricks it is a good idea that others should know about it.
The firm I have been quoting is Messrs. Scott and Son, and I want to put to the House some of the points they have put to me. They write:
New umbrellas are taxed 66⅔ per cent., and in some cases have an Uplift of 6 per cent. Naturally we in the trade consider this tax too high… The particular point we want to bring to your notice, however, is a new Treasury Order… This Order puts a

tax of 100 per cent. on all umbrella parts. These parts were previously tax free except elastic bands and tassels.
It is just like the Treasury to concentrate on tassels—
This tax will of course increase the charges of repairs to our customers, out of all proportion to the value of the umbrella to be repaired (these are usually in poor condition). The public expect prices to go down not up—
That, I may say, is in the Conservative Party Manifesto—
Another serious and most unfair position has arisen with regard to the 'D' scheme for umbrellas being re-covered. For 60 or 70 years our firm has dealt with … They are known all over the country as specialists in 'made-up' umbrella covers. We use … pattern book and order covers daily as required for our customers. These covers are put on in our own workrooms. The Purchase Tax on these covers is 50 per cent. Under the 'D' scheme it is possible—

Mr. Boyd-Carpenter: On a point of order, Mr. Deputy-Speaker. I shall be grateful for your guidance. As I understand her, my hon. Friend is discussing the question of Purchase Tax upon covers. In view of the fact that covers are excluded from this Order and that such tax as is payable is payable under some other provision, is their discussion in order? Were it to be in order it would be my duty to reply, and I do not wish to be inhibited in so doing.

Mr. Paget: Further to that point of order—

Miss Ward: Before you reply, Mr. Deputy-Speaker, if my hon. Friend would allow me to finish the letter, he would see my point, which is directly related to the Order. He does not need to reply to that part. I cannot believe that he wants to deprive small umbrella repairers of the right to have their case heard in Parliament. It is the only chance that we have, but if my hon. Friend wants to take this point I will gladly give way if he will give an undertaking that there will be another occasion when it will be in order. He can take his choice. I will leave out this part and I will go on to the other, because I do not want to put you in any difficulty, Mr. Deputy-Speaker.

Mr. Deputy-Speaker: I shall be put in less difficulty if nothing more is said on this point. The Order is perfectly simple. The Order relates only to
Parts of and fittings for umbrellas. …
The hon. Lady is going quite beyond the Order.

Mr. Paget: Further to that point of order. Surely parts of umbrellas other than covers are used by umbrella repairers. The complaint here is that in order to save some manufacturing interest which finds that it is having unfair competition by a side wind and accident, the umbrella repairers who are small people are being injured. Surely, that must be in order.

Mr. Deputy-Speaker: The hon. and learned Member is being very kind to help the hon. Lady, but that is not quite what she was saying.

Miss Ward: I did not need the help. Grateful as I am for it, I am perfectly capable of standing on my own feet. As I have heard with very great interest both my hon. Friend on the point and my hon. and learned Friend on the other side of the House—I call him my hon. and learned Friend because he agrees with my view—referring to small repairers, I will skip that little part, because I have made my case.
I will go to the next point, which is exactly what has been said already by the other two hon. Gentlemen. This is from a specific firm of repairers who are affected by the Order—I hope that this puts the matter in order—and who say:
We quite realise that we can send our recovers to a manufacturer and not have to pay the 50 per cent. tax, but this would mean closing our workrooms and dismissing our old umbrella workers. … You will now see how serious our position is through these ridiculous regulations. Other firms … will send umbrellas to manufacturers, and can undercut us in our own speciality. …
After all, the Financial Secretary dealt with all this. It is a wonderful thing what people can get away with when they are introducing Orders. It is only when the critics come along that it is so difficult to keep within the rules of order. The firm go on to say:
We still intend to carry on our own workrooms if at all possible.
By putting this 100 per cent. tax on these parts, the difficulty will be that when customers bring in their umbrellas to be repaired, the price for them must go up. Therefore, it will pay people to disregard the small shops which repair umbrellas and to try to buy through firms who get their umbrellas supplied by the big manufacturers.
I am now becoming a little more emphatic, because it has been my hon. Friend's intention to try to prevent my making the case that I want to make. So I now say quite emphatically that he is on the side of the big battalions, and I am on the side of the small repairers whom I have known since my childhood.

Mr. Deputy-Speaker: And I am on the side of the rules of order.

Miss Ward: Having made my point to the best of my ability, I ask my hon. Friend to remember that the Conservative Party stands for the small man. I do not want to see these small repairers being penalised by an Order, however right and proper the Order is. It is a very good thing to say that when one is doing justice one must also seem to be doing justice, and certainly to those to whom justice does not seem to be done.
Why should workers who have been employed in workrooms repairing umbrellas for years and years, and doing it during the war, have to lose their employment because some wretched manufacturer of umbrellas has broken the law and defrauded the Treasury? It is about time that we managed to find some regulation that will do justice to all sections. Having made my case, I will now sit down.

Dr. Stross: Has the hon. Lady not noted that men are allowed to carry walking sticks without paying Purchase Tax and that women cannot have umbrellas without paying it? Is the hon. Lady finishing her speech without some reference to this?

Miss Ward: I am grateful to the hon. Member. Of course, I had noted it. I thought, in fact, that it was very much a man's Order, but as I had been out of order so often I felt that a controversy between the sexes had better be left for a more suitable occasion.

8.45 p.m.

Mr. I. Mikardo: The hon. Lady the Member for Tynemouth (Miss Ward) as always, has given a brilliant demonstration of the justice of her claim to be able to stand on her own feet and I am sure that all hon. Members on both sides of the House enjoyed it. I particularly enjoyed the devastating attack she made upon the Government, firstly for ignoring the interests of the


small man, which they are always claiming to support—a promise which again they are breaking—and secondly, for failing to honour their promises to reduce Purchase Tax.
I hope it will not be misunderstood and that my motives will not be doubted when I say to the hon. Lady that the next time she feels in the mood to make such a devastating and, if I may say so, effective attack upon Her Majesty's present Government, I shall be delighted to offer her the hospitality of a platform in South Reading from which she could do it to a very appreciative audience.
We are always very glad when we see either a breaker of the law prevented from doing it again or an evader of the law finding that a loophole has been stopped. The hon. Lady made a serious point—and I am with her 100 per cent.—in pointing out that it is a pity when, in the interests of manufacturers, action is taken which makes it difficult for the small man to keep in business against the competition of the big organisation. I am sure that the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow) will agree that the trade association is dominated by the large manufacturers.
This is all the more true, as the hon. Lady has with complete justice pointed out, when we are balancing a manufacturer against a repairer. One of the few remaining repositories of craftsmanship in British industry is places where things are repaired rather than places where things are made. The expert shoe repairer, the expert watchmaker, the expert umbrella repairer, all have a great deal of the craftsmanship which originally went into the manufacture of the goods but which has now, for various reasons, largely disappeared from the manufacture of the goods now that they have become a piece of mass production.
Like the hon. Lady, I have no interest to declare in this business, but I speak with some practical knowledge of it because I acted as a consultant to one of the most famous of umbrella manufacturers for a great many years. If I may be allowed to add the information, I initiated some quite revolutionary patterns which to a large extent changed the manufacturing of umbrellas.
I try to look at this matter from the practical point of view. I wish to make

two points to the House. First, I want to reinforce a plea made to the Parliamentary Secretary by my hon. Friend the Member for Islington, East (Mr. E. Fletcher). Umbrellas are comparatively easy things to assemble. The frames are assembled with cheap and small hand tools and the cover is applied by sewing, or by a very simple form of rivetting. As my hon. Friend pointed out, there are many other things which are easy to assemble in that way. I stick to smokers' requisites; a pipe is one and cigarette lighters, or some simple forms of them, are such items, but there are many others.
Doubtless, the Financial Secretary can tell us whether there has been in any other industry other than that of umbrellas any use on a significant scale of the sort of device which this Order is intended to counteract. If it is not so, well and good, but if it were so, it would be a pity if, in doing the very good job of passing this Instrument, we nevertheless seemed to cast an unfair aspersion on one industry as against another. Here I am sure I carry the agreement of the hon. baronet.
The other point I make is a technical one. Exempted from Purchase Tax are ferules, covers, or materials shaped for use in the manufacture of covers. I should like to ask the Financial Secretary what happens to a roll of cover material. In the piece it is not, of course, to use the words of the Order,
shaped for use in the manufacture of covers.
It is shaped no differently from a roll of towelling, sheeting or suiting. It only becomes so shaped when it is cut into those nearly but not quite triangular portions—I say "not quite" because they are arc-sided, not straight-sided—technically known as gores, which in this sense has no sanguinary significance. Until so cut it is not shaped for use in the manufacture of covers.
What happens if one firm wishes to sell to another a roll of cover material? Does that transaction bear Purchase Tax, because if it does and Purchase Tax has been paid on it, I do not suppose that there would be any practical method of claiming a rebate on it once the piece had been cut. I may be wrong, and I should be grateful for clarification by the Financial Secretary, but it seems to me


that the exception of the material is not as helpful as would appear on the face of it.
I join with other hon. Members on both sides of the House in supporting this Order, but there are some implications of it which do not appear to have been thoroughly considered. I hope they will be.

Mrs. Eveline Hill: It might be thought that I am interested in this subject because I come from Manchester, but I strenuously deny that we use umbrellas any more than they are used in any other parts of the British Isles. This Instrument reveals a rather sad state of affairs, though what particularly disturbs me is the rather complicated method of tidying up the whole matter. Because of that I would urge the Financial Secretary to look once more at this matter and see if he cannot evolve something easier, simpler and less time-wasting than the Order will be to be put into operation.
We are all glad that walking sticks are to remain untaxed, but I think, with other Members, that we should all like to see this particular form of taxation done away with altogether. I rather fancy that is impossible at the present moment, but I suggest to the Financial Secretary that it would surely be easier, simpler and certainly very much better to collect a 3⅓ per cent. over-all tax rather than to put these different rates of taxation on so many different parts of a small article such as an umbrella.

8.53 p.m.

Mr. Douglas Jay: I should hate to keep the Financial Secretary from his supper for the second evening running, but so long as the other Treasury Ministers insist on absenting themselves from the Chamber we are forced into the dilemma between our natural humanity to Financial Secretaries and our duty to examine the legislation, good, bad or indifferent, which the Government are now bringing forward.

Mr. Boyd-Carpenter: Will the right hon. Gentleman allow me to reassure him? On this most important matter, in the sense in which he has referred to it, I have had it.

Mr. Jay: Even if we have not to protect the hon. Gentleman from hunger, I thought we should have to give him physical protection from the hon. Lady the Member for Tynemouth (Miss Ward) behind him, but she has now departed.
We understand from the Financial Secretary that this is an anti-inflation measure similar to many which the previous Government brought forward under the Finance Act, 1948. It is intended to stop various loopholes and to prevent avoidance of tax. I expect the hon. Gentleman has had some learned and ingenious advice from the Customs and Excise on this matter. I have had enough experience of that Department to attach a great deal of weight to their recommendations. Nevertheless, it did seem to me that the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow) raised one or two points which the Government ought certainly to consider. As I understood him, he argued that there were other loopholes—or perhaps leaks is the more correct word in this connection—which might break out if this one is stopped. If that is so an attempt should be made to stop up those also.
In addition it seemed to me that the hon. Lady the Member for Tynemouth—who, I warn the Financial Secretary, has now returned to the Chamber—also made a point which at least deserves consideration when she said there was a danger—and I am sure this was not the intention of the Government or the Customs and Excise—of this Order strengthening the hold of the trade associations and large manufacturers to the detriment of the smaller firms. There is sometimes a danger which one has to watch of the administrator listening a little too much to the trade associations. That is not to say he ought never to listen to them at all, but it is a danger which, I think the Financial Secretary would agree, ought to be watched.
I should like to ask one question which might arise from the fact that I did not entirely follow the Financial Secretary in his original speech. As I understand it, the tax on complete umbrellas is at present 66⅔ per cent. and the tax on walking sticks is nil. They are exempted. It is now proposed to


put a tax of 100 per cent. on parts of umbrellas and walking sticks, according to this Order. I understand it is necessary to impose the higher tax of 100 per cent. on parts of umbrellas for the reason which the hon. Gentleman mentioned—because it is the most effective way of stopping evasion. I did not, however, quite follow why 100 per cent. tax had also to be imposed on parts of the walking sticks, but I am sure that he will be able to explain that.
I should also like to say one other thing, because I see that the hon. Member for Dumfries (Mr. N. Macpherson) is present and I know he takes an interest—or he did a few years ago—in this question of Purchase Tax on umbrellas; and maybe he will say something later on. The hon. Lady the Member for Tynemouth said that it was part of the Conservative Party's policy to look after the small man and to bring down prices, and I agree with her that there is a certain prima facie inconsistency between that general doctrine, which she says her party professes, and the action of the Financial Secretary.
There is also a similar inconsistency between what the Financial Secretary is now doing and an Amendment which the Conservative Party introduced and supported in the debates on the Finance Bill in 1948. It was the hon. Member for Dumfries who wanted the tax, not raised to 100 per cent. on parts of umbrellas, but reduced to zero. Indeed, he said at that time:
I submit that it is wholly illogical to increase the Purchase Tax on umbrellas; if anything, it should be reduced or abolished.
That was a very categorical statement, and we should like to know, before the Financial Secretary intervenes, whether the hon. Member still takes that view. He said:
Logic demands that we reduce the tax in order to ensure that everyone carries an umbrella.
That is a sentiment with which the hon. Baronet the Member for Middleton and Prestwich will, I am sure, agree. The hon. Member also said, and I dare say that the hon. Lady the Member for Tyne-mouth will agree with this:
The real essence is that an umbrella is a necessity, especially for ladies.

This proposition was then supported by perhaps an even more eminent Member of the party opposite. It was supported by the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton), now one of the advocates of more extreme measures of economy in the Tory Party. He said:
It is a tremendous addition to the tax when a manufacturer is subject to a tax of 66⅔ per cent. instead of 33⅓ per cent. In this case I am told that it is going to knock this trade about in a most surprising manner."—[OFFICIAL REPORT, 8th June, 1948; Vol. 451, c. 2096–8.]
I remember that at the time the idea of the umbrella trade being knocked about in a surprising manner caused me a certain amount of concern. However, we see that here, as in so many other matters, so far from the Tory Party carrying out the propositions for lowering taxation which they so often tried to persuade us to do, they are doing exactly the reverse and in this Order actually raising the tax by a small amount.
We shall not oppose this Order, because we are opposed to evasion of taxation, but we note that this is yet another case where the party opposite have not merely failed to live up to their promises but in fact have done exactly the reverse.

9.1 p.m.

Mr. Boyd-Carpenter: I will pass over the concluding flourish of the right hon. Gentleman the Member for Battersea, North (Mr. Jay)—he enjoyed it: it did nobody any harm—and reply to the points raised in the debate. The hon. Member for Islington, East (Mr. E. Fletcher), who is not now in his place, but who no doubt will read my answer in the OFFICIAL REPORT, asked me two questions. First, he asked when the process which this Order is designed to stop was found to have started. So far as we know, it was in the month of June of this year.
He also asked, as did the hon. Member for Reading, South (Mr. Mikardo), whether there were other cases. I am advised that at the moment there are none. In view of the nature of these devices, it is perhaps material to point out that the likelihood of other cases developing or not may be closely connected with the question whether we show in this case that the Government are able to stop it.
The hon. Member for Middleton and Prestwich (Sir J. Barlow) rather doubted


whether this Measure went far enough to stop it. I remind him and the House that in moving this Motion I said that we were proposing to watch the operation of this Order closely and that if, notwithstanding the indications which we have at present that it is serving its purpose, the hon. Baronet's fears turned out to be justified, then we should not hesitate to take such other measures as might be necessary.
I am glad to recall that hon. Members on both sides of the House have indicated that they agree that it is wrong to allow loopholes of this sort in any system of taxation, whatever one may think about the system. Other comments upon this Order came from a number of hon. Members, including the hon. Member for Stoke-on-Trent, Central (Dr. Stross), the hon. Lady the Member for Tynemouth (Miss Ward) and the hon. Lady the Member for Manchester, Wythenshawe (Mrs. Hill), all of whom raised the question of the effect of this Order upon the small repairer. Obviously that is an aspect of the matter which we shall have to watch.
We certainly do not wish to do injustice to the small man. I often under why the small human being is always a small man: we desire equally not to do any injustice to the small woman. We will watch this situation carefully. I think that I can give some consolation to hon. Members who raised this point. The large item in repairing is the fitting of a new cover. That is not affected at all by this Order. Therefore, so far as repairs to covers or the fitting of new covers are concerned, the Order will not affect the position. I believe that work, of that type is a substantial part of the small repairers' business. None the less, it is a point which, of course, we shall very properly have to watch.
The hon. Member for Reading, South raised the question of craftsmanship—and I may say I fully agree with what he said on that—and asked how the exclusion of covers operated. He raised the question whether covers could be exempted when rolls of the material of which they were made were subject to tax in the ordinary way. Covers, though not dealt with in this Order, are, as I explained in moving the Motion, none the less subject to tax under the normal Purchase Tax provisions relating to

fabrics of this sort. This Order has nothing to do with that, but they have carried and do carry Purchase Tax at the rate of 50 per cent. under the ordinary provisions affecting similar fabrics. There is none of the difficulty, which the hon. Gentleman apprehended, of a tax-free cover with tax upon the material of which the cover is made. I hope that clears up the points he had in mind.
The right hon. Member for Battersea, North raised the question why it was necessary to include parts of walking sticks. The answer is that, in practice, it is quite impossible to distinguish between certain parts of umbrellas and certain parts of walking sticks. The simplest example is the curved handle, which can be seen adorning the arms of hon. Members from both sides of the House during their walks about London in the ordinary English weather. It is impossible to make a distinction between them, and that is the reason for their exclusion.
In view of that explanation, and of the general desire of the House to see that the tax is not evaded in this case, I hope the House will now see fit to give its approval to the Order.

9.7 p.m.

Mr. Niall Macpherson: I think the House will sympathise with my hon. Friend the Financial Secretary in having to introduce this little Order. My hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) has really demonstrated that this Order will not go far enough to meet the difficulty. My hon. Friend says he will watch it to see if it is not going far enough to meet the difficulty, and that, in that case, in due course he will take some action to meet it.
What action will he take to meet it? What further action can he take? Surely there were two choices open to my hon. Friend in this case? Let me say at once that the reason why I am sorry for my hon. Friend tonight is that this is a legacy of the planners on the other side. They introduced this tax, or at any rate they raised it, and they failed to appreciate the loophole that now has to be met.

Mr. Glenvil Hall: Is the hon. Gentleman telling the House that the Purchase Tax was introduced by the late Labour Government?

Mr. Macpherson: No, it was introduced early on in the war, but hon. Members on the other side had the opportunity of dealing with matters of this kind, and they doubled the tax. What I am now saying is that my hon. Friend had a difficult choice to make. Either he could say, "We must do something to block up this leakage," or, alternatively, the other choice was to remove the tax altogether.
Hon. Gentlemen opposite have asked my hon. Friend whether this kind of difficulty has arisen on any other matter, and he said that as far as he knew it has not. Therefore, this is an isolated case. Surely the right line to take is to treat it as an isolated case, on which we should say that here is a tax which has really proved administratively impossible and that the right choice would have been to remove the tax altogether.
I am sorry that my hon. Friend is not doing so, though I fully sympathise with the position in which he has been placed. I hope that in future when administrative difficulties of this kind arise he will take the opportunity to do away with the Purchase Tax, instead of merely trying to stop up the gaps. I mean no disrespect, but I think this is a piffling matter and that it is really ridiculous that the time of the House should be wasted on matters of this kind. I hope that in future in cases like this when a Purchase Tax grows administratively impossible it will be removed instead of steps being taken to try and block up the leakage.

9.10 p.m.

Mr. Ede: I sincerely hope that no Government will take the advice that has just been tendered by the hon. Member for Dumfries (Mr. N. Macpherson), because it would merely mean that if any body of citizens object to a tax all they have to do is to raise administrative difficulties. Goodness only knows that that would be quite easy with regard to any tax, and the Government would be expected to give way to all kinds of pressure. That may be sound doctrine in Dumfries, but I very much doubt whether it would stand much examination in Westminster.
The reply from the Financial Secretary indicates that he is well aware of the fact that this Order does not remove all the difficulties and that it creates some that

will need very careful watching. But I would have hoped that the House would be unanimously of opinion that where there is tax evasion steps should be taken to see that that evasion should discontinue.

Viscount Hinchingbrooke: Eggs.

Mr. Ede: I am not quite sure what the noble Lord means by that. They are not articles that should be thrown in the House, and I really do not see quite where they come into the debate on Purchase Tax. As far as I know, there is no Purchase Tax on eggs. There was one dark saying by my hon. Friend the Member for Islington, East (Mr. E. Fletcher) about umbrellas in universities which I did not follow at all.
I recollect going to a university, I believe even before the hon. Lady the Member for Tynemouth (Miss Ward) went to an umbrella repairing shop, and that was indicated as being somewhere in the Dark Ages. No member of my family having been to a university before, I went armed with a new umbrella. I regret to think what happened to that umbrella on the first occasion on which I tried to use it in the precincts of the university; because in those days nobody under the rank of a Master of Arts was supposed to carry an umbrella anywhere in the University of Cambridge. There may be some other less enlightened university where they go in for a system of colours in this matter.
Umbrellas, after all, are articles which might well be discussed on the basis of those who keep the law and those who do not. When I remarked once that the rain falls on the just and the unjust, I was reminded that it fell principally on the just because the unjust had pinched the umbrella of the just.
It is desirable that this House should do even-handed justice. This Order is an attempt to ensure that it should be done. We on this side of the House, while admitting that there are difficulties and that this Order does not entirely meet the situation, see no reason why the Motion should not be carried and the Order made in view of the Financial Secretary's promise that he will watch its operation and take all steps that are necessary, and incidentally secure that no injustice is done to anyone.

9.14 p.m.

Mr. R. T. Paget: I must say that I do not feel very happy about this Order. We have had a discursive debate. We have heard the Financial Secretary on the subject of the little woman, and we have heard my right hon. Friend the Member for South Shields (Mr. Ede) on the problem of umbrellas being articles found rather than bought. I have been stung to speak a little by the attitude taken by the hon. Member for Dumfries (Mr. N. Macpherson).
I do not like this way of imposing taxation. I know it has been done before, and by Governments which I have supported, but it is open to abuse. Inevitably when one is dealing with an industry, it is a convenience for officials to deal with the big people who are represented in the trade organisation, and it is the big people's organisation that has the ear of the Treasury on these occasions.
We heard in the opening speech that it had come to the notice of the Treasury that there was some evasion of this tax. How had it come? That came out later from the hon. Baronet the Member for Middleton and Prestwick (Sir J. Barlow). It had come from the big people in the trade who did not like the competition of the enterprising and ingenious lower down. That is how it came. So the big people have to be protected.
As so often happens—and here we heard from the hon. Lady the Member for Tynemouth (Miss Ward)—when a Measure is introduced to protect and maintain one man's position somebody else is injured by a side wind, and that is precisely what has happened here. The unfortunate umbrella repairers are the people who are really taking the injury of this proposal which is aimed at the tax evader, in order to protect the manufacturers' federation. In the very eloquent letter which was read to us by the hon. Member for Tynemouth, we have heard in what bitter terms they feel that competition.
To return for a moment to the hon. Member for Dumfries, whatever else this Order does, it does not put down the price of umbrellas. Whoever else it serves, it does not serve the purchasing public. We were told—and I think we were told it as a quotation from the Conservative Party Manifesto—that the public expects prices to come down. They had every reason

to do so if they listened to speeches of Conservative Members in opposition, but nowadays all they hear from those benches are reasons why prices should go up. In this case it is a relatively small scale, but again the reasons are why prices should go up. In this case it is the prices of parts of umbrellas which are going up. We are told after that that the Conservative Party stands for the small man. It never does. It is always the large interests that are preferred.
Although the hon. Member for Dumfries says that he would prefer the total abolition of Purchase Tax on umbrellas—and doubtless that is also the view of the manufacturers—none the less he supports this Order. When he spoke on this matter before when this tax was imposed, he did not speak in terms of what suited the manufacturer. He was interested in the customer getting these articles cheaper, and in the need for these articles.

Mr. Macpherson: I did not mention the manufacturer in the whole of my speech. I was not putting it from that angle at all. I was putting it from the angle of the public, and the hon. and learned Gentleman knows that perfectly well.

Mr. Paget: Will the hon. Member then explain why he is supporting this Order? It makes things more expensive for the public, it makes the price higher and it protects the manufacturers from a competition which might bring their prices down.
Whose interest is involved here, except that of the manufacturers? The hon. Member adopted a different attitude last time, when he said:
I submit that it is wholly illogical to increase the Purchase Tax on umbrellas; if anything it should be reduced or abolished.… Logic demands that we reduce the tax in order to ensure that everyone carries an umbrella.… Why should umbrella manufacturers have to pay 66⅔ per cent., while walking sticks, as long as they are only made of wood, are taxed at 33⅓ per cent.… The real essence is, that an umbrella is a necessity, especially for ladies."—[OFFICIAL REPORT, 8th June, 1948; Vol. 451, c. 2096–7.]

Mr. Macpherson: The hon. and learned Member asked what other interest is involved except that of the manufacturers. His right hon. Friend has told us that it is in the interests of good administration. That is an interest which his right hon. Friend has alleged, anyway.

Mr. Paget: Do we understand now that the hon. Gentleman is supporting this Order, not in the interests of the ladies, to whom, he told us, an umbrella is a necessity which they all ought to possess; but because there is another and wider interest which has occurred to him? This is not good enough. However much talk and "guff"—if I may use the word—there may be about the interests of the public, what hurts hon. Members opposite is the thought that the sellers' interests may be injured. They are not thinking of the buyers.
I look with a not too unfriendly eye at enterprising people who may discover means to create a little competition in these pretty closely held productive fields, and I should have thought that we could deal with this sort of thing in the next Budget. This is not the way in which we should introduce new taxation in the middle of a year, particularly when it is pointed out as was done in most eloquent terms by the hon. Member for Tynemouth—that we are thereby injuring the interests of people whose activities are perfectly innocent and have never been attacked.
When this sort of thing is dealt with in the Budget there are preliminary negotiations; there is a full debate; there is an opportunity to consider these questions and there are various suggestions, and when it is found that some innocent party is being accidentally injured something can be done to amend it. But where the Government seek to legislate by Order it cannot be amended. The Government cannot say, "We will think again." It is a question of take it or leave it, which should be confined to the narrowest possible sphere—simply to those cases where there is a perfectly plain case of evasion and where other people are not hurt.
Surely this case is one where we could wait until the Budget? There is plenty to think over when we get to the Budget. Here we have umbrellas and sunshades under Group 21 in the second category, walking sticks and canes wholly of wood, except for the ferrules, in the first category, and all other kinds in the third category. Now we are going to have umbrellas and sunshades in the second category and bits of them in the third. Surely this requires a little logical thinking.
Section 20, which is the governing one, contains in subsection (5) the words:
In determining the question which of two rates of purchase tax is chargeable under the said Part I in respect of a vehicle, where that question depends on the retail value of the vehicle, the provision of Part II of the Fourth Schedule to the Finance Act, 1947.

Mr. Speaker: I do not see what all this has to do with the Order. The hon. and learned Gentleman seems to be going back on the whole subject of Purchase Tax.

Mr. Glenvil Hall: On a point of order, Mr. Speaker. What we are doing is amending Group 21 of the Schedule, and therefore, subject to anything that you may say, I take it that we are entitled to discuss anything which happens to be in that group, since it is that group which we are amending.

Mr. Boyd-Carpenter: Further to that point of order. All that we are doing by means of paragraph 1 of the Order is to insert a paragraph into the group, and that does not open up, I submit, a debate on anything else that may happen to be in that Schedule.

Mr. Speaker: That was the point which had occurred to me. The Order before us is quite clear and limited in scope, and it would not be in order to stray as far as the hon. and learned Gentleman the Member for Northampton (Mr. Paget) is purporting to do.

Mr. Geoffrey Bing: Surely it is of importance to decide whether other articles in the same group are treated in the same way. As I understood the argument of my hon. and learned Friend the Member for Northampton (Mr. Paget), it was that this was due to a pressure by various interests who were upset by this competition which was, as he thought, lowering the price to the public. Surely one of the things we should look at is whether other articles in the same group, which might be manufactured in the same way in order to avoid the attraction of tax, have been similarly dealt with, because that would or would not substantiate his point.

Mr. Speaker: I should never agree to that interpretation of the rules of order. That would be to extend every little Order we discuss over the whole realm of Purchase Tax.

Mr. Glenvil Hall: If I understood my hon. and learned Friend the Member for Northampton (Mr. Paget) aright, he was explaining to the House—no doubt many hon. Members have forgotten it—just what the different classifications are. We are putting something into the third column of the Schedule. My hon. and learned Friend had perhaps not quite got to the third column. He was indicating to the House just what the different columns meant and what the incidence of taxation on an article in a certain category meant.

Mr. Speaker: I have sufficient confidence in the hon. and learned Gentleman the Member for Northampton to know that he will take what I have said in the spirit in which it is meant and will confine himself to what is relevant to the Order.

Mr. Paget: I am most grateful to you Mr. Speaker for what you have said, and I am also most grateful to my hon. Friends who have come to my assistance. Perhaps I might preface the point I wanted to make by saying that we are dealing here with Schedule 21 and that a Schedule does not stand by itself. It has no meaning of its own. It has a meaning and an effect only as an addendum to an operative section, and it is to the section to which the Schedule is an addendum that I was drawing attention. Save by considering the terms of the operative section, we simply do not know what this addition, which is an addendum by this Order to an addendum, should mean.
It is Section 20 about which I wanted to ask the Financial Secretary. That is the section on which the Schedule hangs. It says:
Without prejudice to the generality of any existing definition in the enactments relating to purchase tax, any treatment of goods which affects the get-up of the goods and which results in the goods becoming chargeable goods or becoming goods in respect of which tax is chargeable at a higher rate shall be deemed for all the purposes of the enactments relating to purchase tax to be the application of a process in the course of making the goods.
In this section, the reference to get-up includes a reference to marking, labelling"—
Maybe that does not arise here—
packing or any other treatment adopted for identifying or presenting goods to the user or consumer.
If this process to which objection is taken is part of the treatment to these

goods, then does not part of that treatment become by this Section part of the goods? I do not quite see how the hole, which it is proposed to fill up, comes to be empty. Perhaps the Financial Secretary could give us an explanation as to how these manufacturers keep themselves out of the provisions of Section 23 or Section 24, which also might have something to do with it. May be we can have a reply to that from the hon. Gentleman when he comes to speak.

9.30 p.m.

Mrs. Jean Mann: I am glad that I caught your eye, Mr. Speaker, because I am anxious to say a word on this Purchase Tax (No. 7) Order, 1952. I consider it despicable and mean to introduce this Order at this time. I am surprised that it has been put forward by the hon. Gentleman. He has sat on the Treasury Bench for the past half-hour with a benign Father Christmas look on his face, whilst in cold blood he has introduced an Order more like Ali Baba surrounded by the other forty.
The Government Front Bench have constantly asked the women of this country to bear the bigger share of the burdens of our economic recovery. If one notices men and women with umbrellas, one generally sees that the gentleman's umbrella is beautifully folded, indicating that it is seldom used for a useful purpose and that he does not use it as a woman does. If one watches a woman with an umbrella, it will be noticed that she uses it to protect from the wet what the doctors tell us we need most to protect when it is raining—across the back of the shoulders.
The Financial Secretary wishes to make it more difficult to obtain an umbrella. He has discovered that private enterprise can be too enterprising for him, because someone discovered how to make the parts and the fittings and how to avoid the payment of Purchase Tax. I am surprised that the benches opposite are not filled tonight. Where are the noble and gallant band of Conservative M.P.s who pledged themselves in the columns of the "Daily Express" during the Election that they would do all in their power to abolish Purchase Tax? Are they accepting this Order? It would


appear from their absence that they are, and whilst I am not in sympathy with people who try to evade their obligations, I have in this scheme sympathy with those who have been trying to get round Purchase Tax, because I consider it includes necessaries like umbrellas. They have been trying to produce a cheap umbrella, and I should have thought the Treasury would have encouraged them.
If umbrellas are not bought, hats will have to be replaced more often. The Chancellor is therefore encouraging spending and discouraging saving. I ask the Financial Secretary how much he will save in imposing a tax upon sunshades. The Order must come into operation on 20th October. How many people will use sunshades in November, December, January, February, March, April, which is a rainy month, and May, which is also a rainy month? Indeed, one might say that of all the other months of the summer. How much does the Chancellor expect to catch in the net by bringing sunshades into the Order and making it operative from 20th October? Could he not have given us a little warning, and let all of us have purchased umbrellas before the Order operated?
It now appears that Christmas gifts are to be cancelled. The Chancellor is imposing a set-back on the Christmas spirit and on the merchants who were hoping to get rid of a great number of umbrellas between now and Christmas, and he ought to reconsider this Order. I do not know how much he will get out of it, but if all he will lose were put in the balance against it, I think he would be financially better off by allowing these people to escape the net. I have pleasure in opposing the Order and in asking the Minister to relent and to withdraw it.

9.38 p.m.

Mr. Geoffrey Bing: I have heard only a little of the debate, but I intervene to congratulate the Financial Secretary on behalf of his chief. The Chancellor was an umbrella man par excellence. He was the man who took the place of his right hon. Friend when umbrellas were triumphant in the party opposite. In the days of Munich, all Members of that party carried umbrellas, except two, who said they would not carry umbrellas. The Chancellor saw fit to step into the shoes of his right hon.

Friend. This Order is appropriate to the source from which it comes.
It is a great pity that we have heard little about this Purchase Tax method. Many of my hon. Friends think it is right and proper that Orders of this sort should be made at this sort of time and that there should be a degree of fiscal flexibility. I should be straying beyond the bounds of order were I to suggest that the need for an annual Budget is nothing like so clear as it would otherwise be if we did not have Orders of this kind coming forward all the time. Why should we not have certain taxes at certain times, and be able to readjust them at any time that it suits public convenience, in matters of this sort?
The matter to which we are addressing ourselves is whether this particular—and not particularly important—Order should or should not be passed by the House. One of the difficulties which is universally acknowledged is that this is merely stopping one gap, and the question which my hon. Friends have been addressing to the Financial Secretary is why this gap was chosen for stopping. There are immense numbers of similar gaps. For instance, everyone knows that it is possible to buy envelopes apart from stationery, and there are a hundred and one methods by which Purchase Tax can be evaded.
I do not want to press the hon. Gentleman. I merely want to put on record my view that we ought to have a general discussion instead of one confined to this Measure. We should have a general discussion at an early date as to the position of Purchase Tax as a whole. I take the same view as my right hon. Friends in regard to this tax, but hon. Gentlemen opposite do not. It is unfair to them only to have Orders of this kind in which they are circumscribed in the type of criticism they can make. They were returned by a policy which was to abolish all types of tax—

Mr. Speaker: Order. This is far beyond the order.

Mr. Bing: I appreciate that, Mr. Speaker, and I will merely say that I hope the hon. Gentleman will give us an opportunity to discuss these matters within the rules of order and then we


can put this within the general framework of a rational Purchase Tax arrangement, which is what we all hope to achieve.

9.42 p.m.

Mr. Glenvil Hall: I was delighted when my hon. Friend the Member for Coatbridge and Airdrie (Mrs. Mann) intervened, because she said something which came as a piece of news to me. My hon. Friend told us that ladies use their umbrellas to keep the backs of their shoulders dry. I always thought they used their umbrellas to make certain that the new hat in which most of them look so charming did not spoil.
We have had a useful debate, and it has been shared by hon. Members on all sides of the House. I listened with great care to what the hon. Member for Dumfries (Mr. N. Macpherson) said. He was obviously against this Order because he is against Purchase Tax as a tax. We all agree that it is a bad tax. It offends against all the canons of taxation as laid down by the early economists. For that reason, if for no other, it is a tax we should like to abolish. However, I am glad the Financial Secretary resisted the suggestion of the hon. Gentleman that, because this loophole had been discovered, umbrellas and sunshades and the parts of these articles should therefore be relieved from taxation.
The Financial Secretary assured us that so far as he knows there are no other cases of a similar kind. I do not know why he is so certain, because it is obvious—and it is one of the difficulties about this tax and one of the things about it to which most of us object—that it is easy to evade. I thought there was some point in the criticism made particularly from the opposite side of the House, that here we were picking out a certain firm. I can remember clearly that we were much criticised by the then Opposition for doing a similar thing when the Labour Government were in office and we prevented two large industrialists from getting away with large sums of money tax free. Here in another field, so it seems to us, the Government are doing much the same thing, legislating for an individual. It is regrettable and we do not like it, but we are willing on this occasion to realise that it has to be done.
I rose chiefly to say that the hon. Baronet the Member for Middleton and Prestwich (Sir J. Barlow), who knows a great deal about this industry, said that the Order would not prevent the evasion it was aimed to stop. The Financial Secretary, although he made a good reply to some of the other points that were raised, very cleverly evaded answering that statement of the hon. Baronet.
What is the answer? If what the hon. Baronet, who knows this industry extremely well and who stated categorically that the Order will not stop the evasion it is aimed to stop, says is true, what does the Financial Secretary propose to do? The hon. Baronet said that an umbrella which costs 12s. now bears Purchase Tax at the rate of 8s. and that it is eventually sold for 27s. What effect will the Order have on the price of that 27s. umbrella? Twenty-seven shillings for an umbrella is quite a lot of money compared with what people used to get umbrellas for in the old days. How much more will the Order put on the price of an umbrella costing somewhere between 25s. and 30s.?
We should have liked to have from the Financial Secretary some indication of what the effect of the Order will be on prices. We agree in all quarters that tax evasion must be stopped if we can stop it, but we have it seems to watch the effect this Order will have on the price of umbrellas to people who are not evading taxes at all but who do want an umbrella at a reasonable price.
One other question put by the hon. Baronet and which was referred to by other Members was not answered by the Financial Secretary to the satisfaction of some of us on this side. We realise that often when an Order of this kind is made it must affect individuals who are quite innocent and who are also in the particular trade. We were told of the umbrella repairer who is likely to be hit by the Order. Barbers and other small men who mend umbrellas as a sideline were mentioned, but many of us can remember the umbrella man who used to come round and, I suppose, in some parts still goes round the streets. I should like to feel, and, I am sure, Members in all quarters of the House would like to feel, that men of that kind are not penalised by the additional tax which is now to be levied.
Even at this late hour, if the Financial Secretary does not feel too tired, we would like to have some assurance, either from himself or from some other Member on the Government Front Bench, as to whether they are certain in spite of what the expert on the benches behind them said earlier this evening, that the Order will do what the Financial Secretary says it will do. If it does not close the gap, we would like to hear from him what, with those associated with him and advising him at Customs and Excise, he proposes to do.
The Financial Secretary did not tell us how much the Treasury hope to gain by this Order. I suppose it is impossible

for him to say, but it seems to us that they should watch this matter carefully.

Mr. Edward Heath (Lord Commissioner of the Treasury): rose in his place and claimed to move, "That the Question be now put."

Miss Margaret Herbison: On a point of order, Mr. Speaker, I understood that you called me.

Mr. Speaker: No, there can be no point of order. The Closure can be moved at any time.

Question put, "That the Question be now put."

The House divided: Ayes, 218 Noes, 172.

Division No. 2.]
AYES
[9.50 p.m.


Aitken, W. T.
Doughty, C. J. A.
Lookwood, Lt.-Col. J. C.


Allan, R. A. (Paddington, S.)
Douglas-Hamilton, Lord Malcolm
Longden, Gilbert (Herts, S. W.)


Amery, Julian (Preston, N.)
Drayson, G. B.
Low, A. R. W.


Amory, Heathcoat (Tiverton)
Drewe, C.
Lucas, Sir Jocelyn (Portsmouth, S.)


Anstruther-Gray, Major W. J.
Duncan, Capt. J. A. L.
Lucas, P. B. (Brentford)


Arbuthnot, John
Finlay, Graeme
Lucas-Tooth, Sir Hugh


Ashton, H. (Chelmsford)
Fisher, Nigel
McCallum, Major D.


Astor, Hon. J. J.
Fleetwood-Hesketh, R. F.
McCorquodale, Rt. Hon. M. S.


Baldwin, A. E.
Fletcher-Cooke, C.
Macdonald, Sir Peter (I. of Wight)


Banks, Col. C.
Fort, R.
McKibbin, A. J.


Barber, Anthony
Foster, John
McKie, J. H. (Galloway)


Barlow, Sir John
Fraser, Hon. Hugh (Stone)
Maclay, Rt. Hon. John


Beach, Maj. Hicks
Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Maclean, Fitzroy


Beamish, Maj. Tufton
Fyfe, Rt. Hon. Sir David Maxwell
Macpherson, Maj. Niall (Dumfries)


Bell, Philip (Bolton, E.)
Galbraith Cmdr. T. D. (Pollok)
Maitland, Comdr. J. F. W. (Horncastle)


Bennett, F. M. (Reading, N.)




Bennett, Sir Peter (Edgbaston)
Galbraith, T. G. D. (Hillhead)
Maitland, Patrick (Lanark)


Bennett, Dr. Reginald (Gosport)
Godber, J. B.
Manningham-Buller, Sir R. E.


Bennett, William (Woodside)
Gomme-Duncan, Col. A.
Markham Major S. F.


Bevins, J. R. (Toxteth)
Gough, C. F. H.
Marlowe, A. A. H.


Birch, Nigel
Gower, H. R.
Marples, A. E.


Bishop, F. P.
Graham, Sir Fergus
Marshall, Sir Sidney (Sutton)


Black, C. W.
Gridley, Sir Arnold
Maude, Angus


Bossom, A. C.
Grimston, Hon. John (St. Albans)
Maydon, Lt.-Comdr, S. L. C.


Boyd-Carpenter, J. A.
Grimston, Sir Robert (Westbury)
Medlicott, Brig. F.


Boyle, Sir Edward
Hall, John (Wycombe)
Mellor, Sir John


Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)
Hare, Hon. J. H.
Monckton, Rt. Hon. Sir Walter


Bromley-Davenport, Lt.-Col. W. H.
Harris, Frederic (Croydon, N.)
Mott-Radclyffe, C. E.


Brooke, Henry (Hampstead)
Harrison, Col. J. H. (Eye)
Nabarro, G. D. N.


Brooman-White, R. C.
Harvey, Air Cdre. A. V. (Macclesfield)
Nicholls, Harmar


Browne, Jack (Govan)
Heath, Edward
Nicholson, Godfrey (Fareham)


Bullard, D. G.
Henderson, John (Cathcart)
Nicolson, Nigel (Bournemouth, E.)


Bullock, Capt. M.
Hill, Mrs. E. (Wythenshawe)
Nield, Basil (Chester)


Bullus, Wing Commander E. E.
Hinchingbrooke, Viscount
Noble, Cmdr. A. H. P.


Burden, F. F. A.
Hirst, Geoffrey
Nugent, G. R. H.


Campbell, Sir David
Holland-Martin, C. J.
Oakshott, H. D.


Carr, Robert (Mitcham)
Hollis, M. C.
Odey, G. W.


Carson, Hon. E.
Horobin, I. M.
O'Neill Phelim (Co. Antrim, N.)


Cary, Sir Robert
Howard, Greville (St. Ives)
Ormsby-Gore, Hon. W. D.


Channon, H.
Hudson, Sir Austin (Lewisham, N.)
Orr, Capt. L. P. S.


Clarke, Col. Ralph (East Grinstead)
Hudson, W. R. A. (Hull, N.)
Orr-Ewing, Ian L. (Weston-super-Mare)


Clarke, Brig. Terence (Portsmouth, W.)
Hulbert, Wing Cdr. N. J.
Osborne, C.


Cole, Norman
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Partridge, E.


Conant, Maj. R. J. E.
Hutchison, James (Scotstoun)
Peake, Rt. Hon. O.


Craddock, Beresford (Spelthorne)
Hylton-Foster, H. B. H.
Perkins, W. R. D.


Cranborne, Viscount
Jenkins, Robert (Dulwich)
Peto, Brig. C. H. M.


Crookshank, Capt. Rt. Hon. H. F. C.
Joynson-Hicks, Hon. L. W.
Peyton, J. W. W.


Crosthwaite-Eyre, Col. O. E.
Keeling, Sir Edward
Pickthorn, K. W. M.


Crouch, R. F.
Kerr, H. W. (Cambridge)
Pilkington, Capt. R. A.


Crowder, Sir John (Finchley)
Lambton, Viscount
Pitman, I. J.


Darling, Sir William (Edinburgh, S.)
Lancaster, Col. C. G.
Powell, J. Enoch


Davidson, Viscountess
Legge-Bourke, Maj. E. A. H.
Price, Henry (Lewisham, W.)


Deedes, W. F.
Legh, P. R. (Petersfield)
Profumo, J. D.


Digby, S. Wingfield
Lennox-Boyd, Rt. Hon. A. T.
Raikes, H. V.


Dodds-Parker, A. D.
Lindsay, Martin
Rayner, Brig. R.


Donaldson, Cmdr. C. E. McA.
Linstead, H. N.
Redmayne, M.


Donner, P. W.
Lloyd Maj. Guy (Renfrew E.)
Renton, D. L. M.




Roberts, Peter (Heeley)
Stoddart-Scott, Col. M.
Vosper, D. F.


Robinson, Roland (Blackpool, S.)
Storey, S.
Wakefield, Edward (Derbyshire, W.)


Rodgers, John (Sevenoaks)
Stuart, Rt. Hon. James (Moray)
Walker-Smith, D. C.


Roper, Sir Harold
Studholme, H. G.
Ward, Hon. George (Worcester)


Ropner, Col. Sir Leonard
Summers, G. S.
Ward, Miss I. (Tynemouth)


Ryder, Capt. R. E. D.
Sutcliffe, H.
Waterhouse, Capt. Rt. Hon. C.


Schofield, Lt.-Col. W. (Rochdale)
Taylor, William (Bradford, N.)
Webbe, Sir H. (London &amp; Westminster)


Scott, R. Donald
Thomas, P. J. M. (Conway)
White, Baker (Canterbury)


Scott-Miller, Cmdr. R.
Thompson, Kenneth (Walton)
Williams, Rt. Hon. Charles (Torquay)


Shepherd, William
Thompson, Lt.-Cdr. R. (Croydon, W.)
Williams, Gerald (Tonbridge)


Simon, J. E. S. (Middlesbrough, W.)
Thornton-Kemsley, Col. C. N.
Williams, Sir Herbert (Croydon, E.)


Smyth, Brig. J. G. (Norwood)
Touche, Sir Gordon
Williams, R. Dudley (Exeter)


Spearman, A. C. M.
Turner, H. F. L.
Wills, G.


Speir, R. M.
Turton, R. H.
Wilson, Geoffrey (Truro)


Stevens, G. P.
Tweedsmuir, Lady
Wood, Hon. R.


Steward, W. A. (Woolwich, W.)
Vane, W. M. F.



Stewart, Henderson (Fife, E.)
Vaughan-Morgan, J. K.
TELLERS FOR THE AYES:




Mr. Butcher and Mr. Kaberry.




NOES


Acland, Sir Richard
Hall, Rt. Hon. Glenvil (Colne Valley)
Parker, J.


Adams, Richard
Hall, John T. (Gateshead, W.)
Peart, T. F.


Anderson, Alexander (Motherwell)
Hannan, W.
Plummer, Sir Leslie


Anderson, Frank (Whitehaven)
Hargreaves, A.
Popplewell, E.


Awbery, S. S.
Harrison, J. (Nottingham, E.)
Porter, G.


Bacon, Miss Alice
Hayman, F. H.
Proctor, W. T.


Barnes, Rt. Hon. A. J.
Henderson, Rt. Hon. A. (Rowley Regis)
Rankin, John


Bartley, P.
Herbison, Miss M.
Reid, William (Camlachie)


Bellenger, Rt. Hon. F. J.
Holmes, Horace (Hemsworth)
Rhodes, H.


Bence, C. R.
Houghton, Douglas
Robens, Rt. Hon. A.


Bevan, Rt. Hon. A. (Ebbw Vale)
Hubbard, T. F.
Robinson, Kenneth (St. Pancras, N.)


Bing, G. H. C.
Hudson, James (Ealing, N.)
Ross, William


Blackburn, F.
Hughes, Emrys (S. Ayrshire)
Royle, C.


Blenkinsop, A.
Hynd, H. (Accrington)
Schofield, S. (Barnsley)


Blyton, W. R.
Hynd, J. B. (Attercliffe)
Shackleton, E. A. A.


Boardman, H.
Isaacs, Rt. Hon. G. A.
Shinwell, Rt. Hon. E.


Bowden, H. W.
Janner, B.
Short, E. W.


Braddock, Mrs. Elizabeth
Jay, Rt. Hon. D. P. T.
Shurmer, P. L. E.


Brook, Dryden (Halifax)
Jeger, Dr. Santo (St. Panc[...]as S.)
Silverman, Julius (Erdington)


Brown, Thomas (Ince)
Jenkins, R. H. (Stechford)
Simmons, C. J. (Brierley Hill)


Burke, W. A.
Johnson, James (Rugby)
Slater, J.


Butler, Herbert (Hackney, S.)
Jones, Jack (Rotherham)
Smith, Ellis (Stoke, S.)


Callaghan, L. J.
Jones, T. W. (Merioneth)
Snow, J. W.


Carmichael, J.
Keenan, W.
Sorenson, R. W.


Castle, Mrs. B. A.
Kenyon, C.
Soskice, Rt. Hon. Sir Frank


Champion, A. J.
King, Dr. H. M.
Sparks, J. A.


Clunie, J.
Lee, Frederick (Newton)
Steele, T.


Coldrick, W.
Lee, Miss Jennie (Cannock)
Stewart, Michael (Fulham, E.)


Craddock, George (Bradford, S.)
Lindgren, G. S.
Strachey, Rt. Hon. J.


Cullen, Mrs. A.
MacColl, J. E.
Sylvester, G. O.


Dalton, Rt. Hon. H.
McInnes, J.
Taylor, Bernard (Mansfield)


Darling, George (Hillsborough)
McLeavy, F.
Taylor, John (West Lothian)


Davies, A. Edward (Stoke, N.)
MacMillan, M. K. (Westorn Isles)
Taylor, Rt. Hon. Robert (Morpeth)


Davies, Harold (Leek)
MacPherson, Malcolm (Stirling)
Thomas, David (Aberdare)


de Freitas, Geoffrey
Mallalieu, J. P. W. (Huddersfield, E.)
Thomas, Iorwerth (Rhondda, W.)


Deer, G.
Mann, Mrs. Jean
Thomas, Ivor Owen (Wrekin)


Delargy, H. J.
Manuel, A. C.
Thomson, George (Dundee, E.)


Dodds, N. N.
Marquand, Rt. Hon. H. A.
Thorneycroft, Harry (Clayton)


Driberg, T. E. N.
Mellish, R. J.
Timmons, J.


Dugdale, Rt. Hon. John (W. Bromwich)
Mikardo, Ian
Ungoed-Thomas Sir Lynn


Ede, Rt. Hon. J. C.
Mitchison, G. R.
Weitzman, D.


Edwards, W. J. (Stepney)




Evans, Albert (Islington, S. W.)
Morgan, Dr. H. B. W.
Wheatley, Rt. Hon. John


Evans, Stanley (Wednesbury)
Morley, R.
White, Mrs. Eirene (E. Flint)


Ewart, R.
Morris, Percy (Swansea, W.)
White, Henry (Derbyshire, N. E.)


Fernyhough, E.
Morrison, Rt. Hon. H. (Lewisham, S.)
Whiteley, Rt. Hon. W.


Field, W. J.
Mort, D. L.
Wilkins, W. A.


Finch, H. J.
Moyle, A.
Williams, David (Neath)


Fletcher, Eric (Islington, E.)
Murray, J. D.
Williams, Rev. Llywelyn (Abertillery)


Follick, M.
Nally, W.
Williams, W. R. (Droylsden)


Foot, M. M.
Neal, Harold (Bolsover)
Winterbottom, Ian (Nottingham, C.)


Forman, J. C.
Oliver, G. H.
Winterbottom, Richard (Brightside)


Fraser, Thomas (Hamilton)
Orbach, M.
Woodburn, Rt. Hon. A.


Freeman, John (Watford)
Oswald, T.
Wyatt, W. L.


Gibson, C. W.
Paget, R. T.
Yates, V. F.


Glanville, James
Paling, Rt. Hon. W. (Dearne Valley)



Greenwood, Anthony (Rossendale)
Paling, Will T. (Dewsbury)
TELLERS FOR THE NOES:


Greenwood, Rt. Hn. Arthur (Wakefield)
Palmer, A. M. F.
Mr. Pearson and Mr. Arthur Allen.


Grey, C. F.
Pannell, Charles

Question put accordingly, and agreed to.


Resolved,


That the Purchase Tax (No. 7) Order, 1952 (S.I., 1952, No. 1821), dated 15th October, 1952, a copy of which was laid before this House on 16th October, 1952, in the last Session of Parliament, be approved.

Orders of the Day — PUBLIC ACCOUNTS

Committee of Public Accounts nominated;

Mr. Benson, Mr. Blenkinsop, Mr. Boyd-Carpenter, Colonel Crosthwaite-Eyre, Mr. Cuthbert, Sir Ralph Glyn, Mr. Hoy, Mr. David Jones, Mr. Douglas Marshall, Sir John Mellor, Mr. Oliver, Mr. J. Enoch Powell, Mr. Peter Roberts, Mr. David Thomas and Mr. West.—[Mr. Kaberry.]

Orders of the Day — HOUSING (BUILDING COSTS)

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Kaberry.]

10.2 p.m.

Mr. Charles Fletcher-Cooke: I have in my hand one of the gloomiest documents that ever came out of a Government Department. It is the third Girdwood Report on the cost of house building. It covers the period from 1949 to 1951, and I need only read three sentences out of it to give the House some idea of the seriousness of the position, at least as late as 1951. On page iv of the Introduction, the Committee report:
There is no evidence of improvement in output per man in 1951 as compared with 1949, and it is still 20 per cent. below prewar.
On page 13, the Committee find:
If productivity could be restored to the pre-war level, then, with the same labour force as at present, approximately 25 per cent. more houses could be built and the labour cost per house would"—
involve a total saving of something over £100. Finally, on page 19 the Committee find that,
there seems to be no evidence of further progress in the spread of these schemes between 1949 and 1951.
That net costs should rise is perhaps natural in these years, but that net productivity should fall, or at least should remain at 20 per cent. below the pre-war level, after all the publicity and the desire of everybody to try to invent and put into operation all sorts of non-traditional forms of building and all sorts of incentive schemes; that that should have happened and that there should be no improvement between 1949 and 1951, surely shows that there is something much more

radically wrong that mere publicity, or persuasion, or exhortation will cure.
I think that if the much-abused monopoly industries, the oil industry or the chemical industry, had shown a record such as this, they would long ago have been punished by nationalisation; but because this is the citadel of the small man, the building industry somehow gets away with it.
If we contrast our position here today with the position in the United States of America, from which I returned recently, there we see great neighbourhood projects going up at an immense speed, a truly staggering speed, with thousands and thousands of houses being built almost overnight. The cost is enormous but the productivity is high. Joiners earn as much as 30 dollars a day, or about £10 a day at the current rate of exchange, but they earn the money. They work from morning till night. One must see them on the job to see how hard they work.
I submit that there must be something radically wrong with this industry from top to bottom. We heard last Friday a serious indictment from the other side—and I am sure it was very justified—on restrictive practices at the top. Everybody knows that those run all the way through. It is not entirely the fault of the operatives. I have always believed that a trade gets the operatives it deserves and that if they do not get the response they desire, it is as much the fault of the people at the top as it is the fault of the people at the bottom. That is true on any enterprise.
What is wrong? Why is there this contrast between this country and the United States of America on the question of the productivity of domestic house building? I wish to quote two sentences from "The Times" leader on this subject two days ago:
Whether or not it is true that the very structure of the building trade permits only a snail-pace technical progress, experience is strengthening the sorry suspicion that the industry cannot efficiently bear the strain of full, or over-full employment, and that the productivity may not be much enhanced until the state of the market makes profits and wages less easy to earn.
The second sentence is:
The average man does not see the inexorable link between his desire for more and better houses and his willingness and ability to pay for them—except when he has a house built at his own expense.


In other words, surely there is no countervailing power when there are too many cushions and feather beds between the building industry and the consumer, between the man who lives in the house and the building trade. Until one can get some countervailing power in the hands of the consumer, this will continue. If the desire of everybody on all sides to cheapen the cost of building could itself produce that, then surely during the years from 1946 to 1951 that would have happened.
If the ordinary house dweller had to pay an economic rent, I am sure that he would not tolerate this position, and he would be right not to do so. I am not sure that the system of tenders from the local authority to the Ministry of Housing and back is not somewhere at the root of the trouble, but I am sure that the only way to get rid of these restrictive practices on all sides, which have made the productivity of the building industry so poor and kept it low for so long, is to expose house building to the true competition of the market.
The great hopes that were raised about how great non-traditional building experiments would somehow come in and undercut traditional building have certainly not proved effective so far, and I am sure that in many cases they cannot be effective. I know that in my constituency the weather is so wet and the difficulties of building anything but with the ordinary hand brick—and it must be a good hand brick at that—are so great that one cannot employ cheaper and lighter materials which are more easy to carry and handle because they will not stand up very long to the Lancashire climate.
What I should like the Parliamentary Secretary to tell us tonight is whether there is any more hope since the Gird-wood Committee reported. After all, its Reports do not carry us beyond 1951, and there is almost a year's work since then. Can he tell us how costs are running today?
I do not want to make a party point, but my information from a good source is that prices have been going up since then. Whether productivity has been going up or not is a different question, and a vital question, too, because, although more has been paid for wages, which is probably quite right if that has

meant more production, we know there now has to be an extra week's holiday with pay, and that is also quite right if that holiday has been earned by greater productivity. Can the Parliamentary Secretary tell us whether recent figures hold out any hopes of improvement on these lines?
I hope that the Parliamentary Secretary will get to the root of this matter. Of course, we on these benches think that the simpler construction of houses, which is now being used and which reduces costs very considerably, is the right policy, and, indeed, throughout the Girdwood Reports this is recommended. I should not like the Parliamentary Secretary simply to answer that costs are coming down because houses are of simpler design and of a slightly smaller over-all pattern. That is not the point. The point is whether there is an improvement in productivity, taking all matters into account, such as the size of the houses, the increased wages and the extra week's holiday with pay. Can he make a computation, which I admit is difficult to make, and tell us what are the chances for the future?
These costs have really reached a point at which everybody connected with the building trade and everybody at the mercy of the trade are finding their patience exhausted. The local authorities are in despair, and I think that many of them are welcoming the competition which the builders who work for them will have to face from the private purchaser and private builder, which will bring some reality into the matter, because when a man has to pay the full cost of a house, he scrutinises it much more closely than any public servant, however dutiful and careful. In my submission, that will produce a greater air of reality in this matter than has been the case for the last seven or eight years.
We should like to know where we stand. Are there any hopes that nontraditional building, which so far since the war has not fulfilled all the talk there has been about it, may even at this late hour do something to make this industry more efficient? I do not know, but what I do know is that this is a human problem which is threatening to crush us all, because sooner or later we shall have to stop building houses if we cannot afford them. The time has come when we cannot afford any more increases in prices.

10.14 p.m.

Mr. Emrys Hughes: The House should be indebted to the hon. Member for Darwen (Mr. Fletcher-Cooke) for taking this opportunity of drawing the attention of the House and of the country to the imperative need for a greater drive in building the houses which everybody now agrees are necessary. He mentioned the building construction that is going on in New York. If I do not stir too many prejudices, I should like to draw attention to the remarkable work of building reconstruction that is going on in Moscow.
If we are to send a deputation to America to find out the latest methods used there, it would be a good idea to go also to Moscow to see what is going on there. I am quite sure that if the Parliamentary Secretary, and indeed hon. Members from all parts of the House, were to put aside all ideological prejudices and see what is going on in Moscow at the present time, they would be very greatly impressed. I was at the economic conference at Easter, and I passed through Moscow in September. I noticed the tremendous difference in the building that had been achieved in that very short time.
For example, in Moscow the skyline is now dominated by three great skycrapers. The University of Moscow on the Lenin Hills is a huge building capable of housing no fewer than 8,000 students. I was accompanied in Moscow in September by a well-known architect who has taken a prominent part in building houses in London. He expressed the opinion that there was far more mechanisation of the building industry in Moscow than there was in London.
I repeat that if we intend to study methods in some parts of the world we should not be blind to what is going on in other countries. We might do worse than send a deputation to Moscow to find out what is being done there at the present time.

10.17 p.m.

Mr. Harmar Nicholls: If I may say so without disrespect to my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) and the hon. Member for South Ayrshire (Mr. Emrys Hughes), I find their speeches to some extent a little degrading. Before the war, we had

people coming from America, and no doubt from Russia, to see how it was that we were achieving our great successes in this country.
Before the war, in building of all sorts, we were producing goods at a price that compared so favourably with others that we were the centre of interest for people from all parts of the world. I should be sorry to think that a time has come when we should be even thinking of going to other countries to see how to do a job that we used to do so very well ourselves.
I hope that the Parliamentary Secretary can tell us how things have improved over the last 12 months. Can he report progress since the Girdwood Report was published? I hope that he will be able to tell us what has been done to bring about the improvement which I think he will be able to report. I suggest that one reason for improvement is that the climate in which building is allowed to go on has altered and has become a little nearer to what it was before the war when we were the centre of interest and were the guides to other people on how to do the job.

10.19 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Ernest Marples): The House will be grateful to my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) for raising what is one of the most important subjects today. The cost of building will have to be brought down, and to bring it down by permanent distribution of subsidies is an unhealthy sign in a normal economy. The only way is to bring down the cost of house-building.
Before I reply to my hon. Friend, I should like to reply to the hon. Member for South Ayrshire (Mr. Emrys Hughes). The reason why I have not been to Russia is because they will not let me go there.

Mr. Emrys Hughes: Has the hon. Gentleman tried?

Mr. Marples: I tried for three years, and for two years I wrote to the Soviet Embassy every fortnight and asked if they would give me permission. On each occasion either they had no accommodation there or could not give me the travel facilities. On the last occasion when they said that they had no travel facilities a friend of mine in Switzerland offered me


an aeroplane, complete with petrol and food, and so I did not need travel facilities. The Embassy then said that they had nothing to add to their previous letter. If the hon. Member for South Ayrshire can use his influence to get me to Russia, then I will tell him on the Floor of the House that I will go.

Mr. Hughes: I am afraid I have not very much influence, because I tried unsuccessfully to get a visa for three years. Ultimately I accepted an invitation to go to the Economic Conference. Certainly if I have any influence I will be prepared to accompany the hon. Gentleman to Moscow and to act as his interpreter as well.

Mr. Marples: I said I wanted to go, but I did not say I wanted the hon. Gentleman to accompany me. I am anxious to make the visit, but I do want to be alone. I want to be able to go where I want and not where the people in Moscow tell me to go.

Mr. Hughes: Does the hon. Gentleman understand the language?

Mr. Marples: No, but I can understand building operations, which is better than understanding the language. I can tell if they are efficient, because I am not entirely without knowledge of the building industry. To show the hon. Gentleman the humbleness, not only of the junior Ministers but of every one on these benches, I would say that I recently completed a tour of Switzerland, Germany, Denmark, Sweden and Holland, and I have come back, with the Chief Architect of the Ministry, with some ideas of the layouts of the estates, roads and sewers of narrow fronted houses, which would save as much as £50 and even £100 a house if we adopted them in this country.
One of the things which the Minister wants to do is to give a positive and dynamic lead to the country, not only by sending out circulars on this point, but by doing it in three dimensions so that the house can be in existence and the people can see it. The hon. Gentleman who has had the advantage of going to Moscow should go to the village where we are going to build, and he will see how to get costs down, and in return I hope that he will be able to get me to Moscow.
My hon. Friend the Member for Peterborough (Mr. H. Nicholls) asked what we had done since 1952. It was a pertinent question, because the Girdwood Report only takes us to 1951 and it is, therefore, out of date. The first thing that the "Welsh wizard" from Ebbw Vale boasted was that he had cut down costs in 1946. In actual fact, hundreds of pounds were added to the cost of the house. We have made no boast at all. We have taken £150 per house off the cost by the introduction of good and intelligent designs, maintaining the same room size that the Dudley Committee recommended and yet reducing the circulating space. My hon. Friend must remember that the Dudley Committee made its recommendations on the size of rooms on the assumption that the cost would be 30 per cent. above what it was in 1939. In fact, the cost was nearly 300 per cent. up. We have still maintained those generous room sizes, and yet we have cut the cost down by £150.
My hon. Friend the Member for Peterborough asked what we had done in 1952. He asked whether productivity had increased and whether costs had come down. That was a pertinent question. The answer is that I believe productivity has increased in 1952 because the building industry has used more cement and more bricks during that period with a smaller labour force. Therefore, if it has used more material with a reduced labour force, then it stands to reason that there must have been increased productivity.
I will give several reasons why I believe productivity has been increased. The first and most important factor is the question of materials. No person will work hard on a building site unless he is assured of an ample supply of materials on that site. We cannot expect a bricklayer, a plasterer, or anybody else, to work himself out of a job. We have to take practical administrative measures to do two things so far as materials are concerned. The first is to increase the supply and production of materials, for example by putting labour in the brickyards and building houses for them. My hon. Friend will remember that in 1950 when we moved a vote of censure on the then lethargic Government of the day, he suggested that those measures should be taken. They have been taken and they have produced results.
In addition to increasing production, we have reduced the consumption of building materials in the non-housing sector. We have done that by a subcommittee on economy—a very good sub-committee, because I am the chairman of it. This sub-committee on economy has introduced measures whereby important building materials which are used for housing are not used extravagantly in the non-housing sector. We can build just as many power stations as before and we can use fewer bricks. We can get exactly the same amount of electric current and use fewer building materials.
The second reason why I believe we have increased productivity in 1952 is that there is now confidence in the industry, and we cannot get anywhere in production without the confidence of both sides of the industry. What we have done is to tell the people concerned that this is going to be an expanding industry. Previously, if a local authority were told that they could build 100 houses in a given 12 months and they built the 100 houses in 10 months they could not get any extra houses to build, so the 100 houses were spread evenly over the 12 months. Now my right hon. Friend, with that shrewd anticipation we all expect of him, has told local authorities that if they complete their programme before the 12 months are out they can ask for more licences if they have the materials and labour available.

Mr. W. A. Wilkins: The right hon. Member for Bishop Auckland (Mr. Dalton) told them that.

Mr. Marples: Not in the normal loud and booming voice I associate with him, as far as I know.

Mr. Wilkins: Be fair.

Mr. Marples: I will be fair. The party opposite never built 200,000 houses in any year except one, and they only did so then by their "finish the houses" campaign, whereby they dropped everything in order to put a roof on houses which were standing without roofs. The right hon. Member for Bishop Auckland may have said that, but it had no effect on the housing industry whatever. Only in one year were more than 200,000 houses built, and that was the year when the building programme was almost wrecked.

Mr. Emrys Hughes: They built a lot of other things, such as factories.

Mr. Marples: They did not spend as much as is now being spent on factories. The fallacy of the argument of hon. Gentlemen opposite is this: It was perpetrated by the hon. Member for Newcastle-upon-Tyne, Central (Mr. Short), who said that this Government in the first quarter of 1952 had built fewer schools than the previous Government started in 1951, and that therefore we had cut down the school building programme. But the amount of labour, materials and money for school building do not depend on the number of starts, but on the work in progress which is carried over, added to the number of starts in the period, from which is deducted the work in progress at the end of the year, and that gives the monetary assessment of the amount of materials, labour and money which has gone into school building. If that criterion is taken, the hon. Member for South Ayrshire will find that this Government have done more than his Government did as far as the building of schools is concerned. That myth will be exposed in due course in the efficient manner we always associate with this Government.
With regard to non-traditional houses, the difficulty is that in this country today the building of a non-traditional house means the erection of the shell by nontraditional methods, that is, the replacing of brick by "no fines" and other technical substitutes; but that shell represents only 10 per cent. as far as cost is concerned, and therefore, however efficient non-traditional methods are and however much the industry adopts them, they will not be able to bring down the costs simply by prefabrication of the shell. What we have to do is to prefabricate using the system of moduling, what I call, vulgarly, the guts of a house.

Mr. Emrys Hughes: That is what they do in Moscow.

Mr. Marples: The hon. Member may be right. He has a great advantage. He can go there and we cannot. If he will get me a visa and give me a letter to send when I write to the Russian Embassy I shall be happy. I shall go to Moscow and pay my own expenses, and I shall not even eat any Russian food when I am there; I shall drink their vodka.
It is the prefabrication of the guts of a house which really counts. My right hon. Friend has appointed a committee known as the Bailey Committee—to go into the question of the efficiency and speed of building the inside of a house—under Sir Donald Bailey, who was made famous by the Bailey bridge, which made such a great contribution to our success during the war. The Committee's terms of reference are that we are to try to get the efficiency and the low cost of the mass-produced article without the dull uniformity that one associates with mass production, and it can be done if we use the module as the basis for the internal measurements of the house. I hope that Committee will be reporting early next year. Its report will be made available to hon. Members and to the public.
In the Ministry we have decided as a matter of policy that no longer will we be content with issuing mere circulars to people and preaching what they should do. We are going to set an example and show them what can be done in three dimensions and they can come along and see it. It must be shown to people in

three dimensions. One of the architects of the Ministry was driven nearly to the verge of insanity—and almost to incoherence—trying to explain on a plan to his wife what the "People's House" was like, but without success. When he took her to the Ideal Home Exhibition she was converted, as the hon. Member for South Ayrshire was converted when he went to Moscow. I hope the hon. Member went to the Ideal Home Exhibition as well as to Moscow. We are going to show our ideas in three dimensions so that people will really understand what we are trying to achieve.
My hon. Friend must be congratulated for raising a subject which is of the greatest importance and, as I was born in the county which he represents, I am sure the county will be grateful to him.

The Question having been proposed after Ten o'Clock, and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Twenty-eight minutes to Eleven o'Clock.